Sinopec to bump up refining capacity 50%

08:52, May 26, 2010      

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China, the world's second-largest energy consumer, will increase its annual oil-refining capacity by 50 percent between 2010 and 2015 to meet rising domestic demand, according to the country's largest refiner Sinopec.

Annual oil refining capacity is expected to reach 507.5 million tons by the end of 2010, up 6.4 percent from a year earlier, Sinopec said in a report. That figure will be elevated to 750 million tons by the end of 2015, it said.

The country will build three to four oil refining and petrochemical manufacturing bases in regions including the Yangtze River Delta, the Bohai Sea Rim region and the Pearl River Delta, said the report. Each base will have a refining capacity of 20 million tons and ethylene production capacity of 2 million tons.

Oil refining capacity owned by foreign companies will rise to 31.5 million tons per year, or 4.2 percent of the country's total capacity, by 2015 from 10.5 million tons annually at present, said the report.

The refining business, a downstream sector in the oil industry, will be one focus of international oil giants in their expansion in the country, said analysts.

"There will be more cooperation between domestic oil companies and international energy giants in the area," said Lin Boqiang, professor, Xiamen University.

International oil giants will pay increasing attention to development of their downstream business in China, in which their advanced technology can add to capabilities, he said.

In May, Sinopec started operating a 34-billion-yuan ($4.98 billion) petrochemical complex in Tianjin. The facility is able to refine 10 million tons of crude per year and produce 1 million tons of ethylene annually.

The ethylene-manufacturing project is a 50-50 joint venture between Sinopec and Saudi Basic Industries Corp (SABIC), a major petrochemical producer in Saudi Arabia.

Last November, Sinopec began operating China's first joint venture integrated oil refining and petrochemical complex.

The project, located in Quanzhou, Fujian province, has a total investment of around 40 billion yuan and is jointly owned and operated by Sinopec, ExxonMobil and Saudi Aramco, the national oil company of Saudi Arabia.

Imported crude oil is expected to account for 70 percent of China's total oil consumption in the next decade, Sinopec also said in the report.

China's oil dependency reached alarming levels last year with imports accounting for 52 percent of total consumption. Imports of more than 50 percent are considered to indicate an energy security alert.

China first became a net oil importer in 1993. At present the Middle East, Africa and Asia-Pacific are three main regions China imports oil from.

According to a report by the Chinese Academy of Social Sciences (CASS) last year, China's oil production is expected to be between 177 and 198 million tons in 2010, and will reach 182 to 200 million tons by 2015.

Oil output is expected to see a gradual decline after 2020, according to the report of CASS.

Source: China Daily

(Editor:黄硕)

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