Over the next two years, China will add more than 50 million tons of refining capacity

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In the next two years, China will bring online refining capacity of over 50 million tons, and a surplus in refining capacity is likely to persist. The 14th China LPG International Conference in 2009 opened on the 5th in Haikou. Tian Chunrong, a senior engineer in the Information Department of Sinopec Corporation, said at the meeting that in 2008, the domestic refined oil market rapidly shifted from a supply shortage to a surplus after the Olympics; the shortage in refining capacity disappeared overnight. Some newly built or expanded refineries had to delay their commissioning. For example, the CNOOC Huizhou Refinery, with an annual production capacity of 12 million tons, had its commissioning date postponed from last September to this March. According to statistics on construction progress in various regions, the new refining projects that will come online in China over the next one or two years include CNOOC’s project in Huizhou with a capacity of 12 million tons per year, and CNPC’s project in Qinzhou with a capacity of 10 million tons per year; together, these projects will add 22 million tons per year to China’s refining capacity. The 6 expansion projects are Sinopec Fujian, Sinopec Wuhan, Sinopec Changling, Sinopec Tianjin, CNPC Fushun, and CNPC Dushanzi, with an additional refining capacity of 31.5 million tons per year. Tian Chunrong believes that the downward trend in domestic demand for refined oil products in 2009 is likely to remain unchanged in the first half of the year; it may be only in the second half that refinery processing volumes and oil product production will start to increase again. New construction and expansions in the domestic market will further exacerbate the situation of an oversupply of refined oil products. (Dong Yajun, Zhao Yeping) Source: Xinhua Net 【2009-3-9】