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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--In recent months, low demand issues have led Chinese companies to shutter 12 crude distillation units (CDUs) at refineries totaling 1.02 million barrels per day (BBL/d) of capacity between what's planned for 2024 and 2025, according to Industrial Info data. While new capacity is also in the works, to the tune of 816,000 BBL/d of new and 40,000 BBL/d of expansion (five new and one expansion), that still leaves the nation's overall refining capability down by 165,000 BBL/d by the end of 2025, compared to January of 2024.
Explains IIR's Geoffrey S. Lakings, "Crude demand in China has weakened, contributing to a bearish outlook for oil. According to Bloomberg data, China's total apparent oil demand dropped by 6.98% year-over-year, to 14.176 million BBL/d. Total Chinese demand this year, January-September, is down by 3.8% year-over-year to 13.99 million BBL/d."
IIR's Hillary Stevenson points out that China is among world leaders in adopting electric vehicles, and in switching trucks to liquefied natural gas and liquefied petroleum gas, all of which could reduce refined products demand.
Closings
Overall, the closings of Chinese refineries have a number of causes. Some are closing old units and moving to new locations; some refiners have declared bankruptcy; others are closing old units and building new ones at the same location.
Unit Replacements:
New Capacity
Nanshan Yulong Petrochemical Company Limited's 400,000-BBL/d refinery in Shandong Yantai, China, has been scheduling test runs for this year, and is experience some delays. One 200,000 BBL/d crude unit opened in October 2024, while the other, also 200,000 BBL/d, is expected to open in December.
And 220,000 BBL/d are expected in February 2025 at Sinopec Zhenhai Refining & Chemical Company's 540,000-BBL/d Zhenhai Refinery, China. Construction on the Ningbo Refinery Expansion Project (Phase 2) began in 2022. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can learn more by viewing the related project reports.
Existing Unit Expansion
Yueyang Refinery (Sinopec Hunan), currently rated at 160,000 BBL/d, is expanding to 200,000 BBL/d as part of a refining transformation project.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Explains IIR's Geoffrey S. Lakings, "Crude demand in China has weakened, contributing to a bearish outlook for oil. According to Bloomberg data, China's total apparent oil demand dropped by 6.98% year-over-year, to 14.176 million BBL/d. Total Chinese demand this year, January-September, is down by 3.8% year-over-year to 13.99 million BBL/d."
IIR's Hillary Stevenson points out that China is among world leaders in adopting electric vehicles, and in switching trucks to liquefied natural gas and liquefied petroleum gas, all of which could reduce refined products demand.
Closings
Overall, the closings of Chinese refineries have a number of causes. Some are closing old units and moving to new locations; some refiners have declared bankruptcy; others are closing old units and building new ones at the same location.
- Among the largest closings are three units at the Dalian Refinery (PetroChina Dalian), totaling 410,000 BBL/d. CDU 1, 120,000 BBL/d, was opened in 1980, CDU 2, 90,000 BBL/d opened 91 years ago, in 1933, and CDU 3, 200,000 BBL/d opened in 2008. CDUs 1 and 2 closed in 2024, and CDU 3 is set to close by yearend 2025.
This is the largest state-owned refinery, representing 3% of the nation's total capacity, so this closure alone is expected to reduce China's world-leading oil imports. This is part of a plan to relocate to the Dalian Xizhong Refinery and permanently close the other existing units by end of 2025. - Sinopec Qingdao Petrochemical Company Limited will permanently close the 100,000-BBL/d Qingdao Refinery, located in Shandong, China, in September 2025, planning to relocate the 100,000-BBL/d CDU and related units to the new Dongjiakou Refinery.
- A court-declared bankruptcy closed the Shandong Changyi Petrochemical Company Limited's 100,000-BBL/d Changyi refinery on October 28, 2024.
- Shandong Huaxing Petrochemical Group Company Limited permanently closed its 120,000-BBL/d Dongying Refinery in China on October 22, 2024, following the bankruptcy declared by the Shandong's Dongying Court on September 14, 2024.
- Zhenghe Group permanently closed its 100,000-BBL/d Dongying Refinery in Shandong, China, following the bankruptcy declared by the Shandong's Dongying Court on September 14, 2024.
Unit Replacements:
- At its 196,000-BBL/d Jilin Refinery, China, PetroChina Jilin Petrochemical Company permanently closed a 76,000-BBL/d crude unit on August 13, 2024, and commenced commercial production of a new 76,000-BBL/d crude unit on October 28, 2024. The refinery's nameplate capacity remained unchanged.
- CNOOC Ningbo Daxie Petrochemical Limited is planning for the startup of Refinery Expansion Phase 5 at its 160,000-BBL/d Ningbo Daxie Refinery. The refinery's nameplate capacity will increase from 160,000 BBL/d to 240,000 BBL/d. Commercial startup of the new 120,000-BBL/d CDU 3 is anticipated for March 2025 The 40,000 BBL/d CDU 1 will permanently close upon the startup of the newly constructed CDU 3.
New Capacity
Nanshan Yulong Petrochemical Company Limited's 400,000-BBL/d refinery in Shandong Yantai, China, has been scheduling test runs for this year, and is experience some delays. One 200,000 BBL/d crude unit opened in October 2024, while the other, also 200,000 BBL/d, is expected to open in December.
And 220,000 BBL/d are expected in February 2025 at Sinopec Zhenhai Refining & Chemical Company's 540,000-BBL/d Zhenhai Refinery, China. Construction on the Ningbo Refinery Expansion Project (Phase 2) began in 2022. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project Database can learn more by viewing the related project reports.
Existing Unit Expansion
Yueyang Refinery (Sinopec Hunan), currently rated at 160,000 BBL/d, is expanding to 200,000 BBL/d as part of a refining transformation project.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
