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China’s Oil Refining Capacity to Rise at Twice Demand Growth

Bloomberg

 
By Winnie Zhu

Oct. 20 (Bloomberg) — China’s refining capacity will rise at almost twice the pace of demand growth this year, curtailing the need for the world’s second-biggest energy user to boost imports that are at a seven-month low.

The nation’s annual crude-processing capacity may climb 9.6 percent to 434.05 million metric tons, or 8.7 million barrels a day, this year, Bloomberg calculations based on previously announced expansions show. Fuel use may increase 5 percent in 2008, said Tian Chunrong, a senior engineer withChina Petroleum & Chemical Corp., the nation’s biggest refiner.

The world’s fourth-biggest economy is expanding processing capacity to meet demand and reduce a reliance on imports. The nation suffered the worst fuel shortage in at least two years last summer as consumption growth outpaced output.

“The government started a new round of capacity expansions in 2005 to avoid fuel deficits,” Tian said.

Refining capacity at PetroChina Co., Sinopec, as China Petroleum is known, and Cnooc Ltd., may rise about 4.3 percent to 452.55 million tons in 2009 and 5.97 percent to 479.55 million tons in 2010, according to the Bloomberg calculations.

PetroChina, the nation’s second-biggest refiner, and Sinopec account for about 80 percent of the nation’s total processing capacity while privately-run plants, or so-called teapot refineries, run the rest.

Oil Demand

China’s crude-oil demand may rise 5 percent to 8.4 million barrels a day in 2009, the International Energy Agency said Oct. 10. The nation will surpass the U.S. as the world’s biggest energy consumer in about five years, Royal Dutch Shell Plc said in September.

Fuel imports may drop next year, Tian said Sept. 24. Oil- product imports may rise to 47 million tons this year, he said then.

China cut diesel and gasoline imports to the lowest in seven months in September after a slowing economy eased demand, customs figures showed Oct. 17.

The country may become self-sufficient in fuel supplies by 2013 after domestic refinery expansions, Yang Weijun, deputy director of planning and petrochemicals at PetroChina‘s Planning and Engineering Institute, said Sept. 25.

Please see attached tables showing expansion plans of Chinese refineries by 2012.

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