REFINERY NEWS ROUNDUP: China crude throughput jumps in Q1, slows in April

London — Chinese refiners' crude throughput in the first quarter posted the strongest year-on-year growth since 2010, rising 17.8% to 14.17 million b/d as the country's GDP grew 18.3% on the year from a low base given the COVID-19 outbreak during the same period of last year, data released April 16 by the National Bureau of Statistics showed.

On top of the strong GDP growth, the year-on-year increase was also due to the expansion in refining capacity since Q2 last year, including the startup of Sinopec's 200,000 b/d Zhanjiang Petrochemical and the trial run of Zhejiang Petroleum & Chemical's phase 2 project involving its 200,000 b/d CDU.

Throughput was also boosted by state-owned companies ramping up runs ahead of their maintenance season in Q2.

But the throughput volume in Q1 was 0.7% lower than 14.26 million b/d posted in Q4 2020, reflecting slower demand during Lunar New Year when industrial activities were suspended while the government discouraged people movements to prevent COVID-19 re-emerging. This had generated high oil product inventory and boosted net oil product exports to jump 20.1% on the year to 6.98 million mt in Q1, according to data from General Administration of Customs. As a result, the crude throughput volume in March edged down by 0.4% to 14.14 million b/d from an average of 14.19 million b/d in January-February, NBS data showed.

Crude throughput at China's state-run refineries continued to fall in April as more units carried out scheduled maintenance, latest industry data and information collated by S&P Global Platts showed. A total 69.5 million mt/year of refining capacity was offline across nine state-owned refineries in April, almost doubling from 36 million mt/year in March, and the highest level seen in recent years. Six Sinopec refineries were offline in the month, alongside two owned by PetroChina and one by CNOOC.

In other news, Sinopec's 184,000 b/d Hainan Petrochemical refinery in southern China plans to export about 180,000 mt of refined oil products in April, up from 140,000 mt planned for March, a refinery source said April 19. The refinery's exports in April will comprise about 50,000 mt of gasoline, 20,000 mt of jet fuel and 110,000 mt of gasoil, the source said.

PetroChina's 110,000 b/d Daqing Refining and Petrochemical in northeastern Heilongjiang province, plans to keep April gasoline exports steady from March at 70,000 mt, according to a refinery source. The March exports of 70,000 mt has doubled from 35,000 mt in February -- which had been stable for about four months.

Separately, the suspension of six crude distillation units in Japan for planned and unplanned works has tightened the domestic demand-supply balance for gasoline, though demand has been weak, sources said April 22. Meanwhile, well-supplied gasoil and kerosene markets have been little unchanged. As of April 22, six CDUs -- with a total refining capacity of 762,200 b/d and all owned by ENEOS, Japan's largest refiner -- were shut. The sole 129,000 b/d CDU at the Chiba refinery in Tokyo bay, the 95,200 b/d No. 2 CDU and the 105,000 b/d No. 3 CDU both at the 200,200 b/d Mizushima-B plant in western Japan have been shut for a scheduled maintenance, while the 170,000 b/d No. 2 CDU at the 247,000 b/d Kawasaki refinery in Tokyo bay, the sole 127,000 b/d CDU at the Wakayama refinery in the western Japan and the sole 136,000 b/d CDU at the Oita refinery in the southwest have been idle for unplanned repair work.

Japan's crude throughput retreated 4.5% week on week to 2.33 million b/d in the week over April 11-17, with its crude run rates having decreased to 67.5% in the week, data released April 21 by the Petroleum Association of Japan showed. The crude throughput also dropped 13.3% from a year ago, according to S&P Global Platts data. The refinery utilization rates decreased from 70.7% in the week to April 10.

Japan's gasoline demand will take a hit during the Golden Week national holidays over late April to early May due to the country's latest COVID-19 priority measures on populous and tourist popular prefectures, but the motor fuel consumption will likely remain above the level a year ago when the demand plunged to a multi-decade low. Japan's domestic jet fuel demand however is set to mark a year-on-year recovery during the Golden Week national holidays despite the country's latest COVID-19 priority measures on populous and tourist popular prefectures but will remain below the pre-pandemic level in 2019.

Meanwhile, bunker fuel supply at Japan's key Tokyo Bay port is facing disruptions due to problems at ENEOS' Negishi refinery, market sources said. The restart of ENEOS' 145,000 b/d Sendai refinery has also been delayed until April 19-22, the source said. The strong earthquake offshore Fukushima on Feb. 13 had led to the suspension of ENEOS' Sendai refinery The Sendai refinery supplies LSFO components to ENEOS' other refineries.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

Japan

** Japan's ENEOS said April 16 it has restarted its Sendai refinery in northeast Japan, which had been suspended since the strong earthquake offshore Fukushima on Feb. 13. ENEOS initially planned to restart the Sendai refinery in the first half of April. However, another earthquake of magnitude 6.9 occurred off the coast of Miyagi Prefecture, northeast Japan, on March 20. Then ENEOS delayed the restart schedule to mid-April.

** Japan's largest refiner ENEOS has restarted the sole 129,000 b/d crude distillation unit at the Chiba refinery in Tokyo Bay after completing scheduled maintenance on April 22, a spokesman said April 23.

** Japan's ENEOS said April 20 it shut the 170,000 b/d No. 2 crude distillation unit at its 247,000 b/d Kawasaki refinery in Tokyo bay on April 10 for unplanned repair work on a valve, and expected to restart at the end of April.

** Japanese refiner Fuji Oil plans to shut the sole 143,000 b/d crude distillation unit at its Sodegaura refinery in Tokyo Bay for a scheduled turnaround from end-May to end-June, a company spokesman said April 15. "All units will be shut during the large-scale maintenance that is carried out once every four years...there is no problem in terms of supply as the inventory is accumulated in advance, and the sales plan is concluded with companies we supply on the assumption that units will be shut due to maintenance," the person said.

** Japan's Idemitsu Kosan plans to shut the sole 190,000 b/d CDU at Chiba refinery will be shut from end-April or early May to June.

** Japan's Idemitsu Kosan plans to shut the 255,000 b/d Yokkaichi refinery from mid- or end-May to July.

** Japan's Idemitsu Kosan plans to shut at Aichi refinery the sole 160,000 b/d CDU from October to November.

** Japanese refiner Taiyo Oil plans to shut two crude distillation units at the sole 138,000 b/d Kikuma refinery over early June to early August for scheduled maintenance, a company spokesman said April 13. Taiyo Oil will shut one CDU for about a month, then shut down the other after restarting, but it has not yet decided whether to stop the 106,000 b/d No. 1 CDU or the 32,000 b/d No. 2 CDU first, the spokesman added. "We will maintain a stable supply of oil products because we carry out regular maintenance while operating one CDU," he said. Taiyo Oil undertakes a large-scale planned maintenance every four years to shut all units, including the 32,000 b/d RFCC, which is scheduled in 2022, the spokesman said.

China

** Sinopec's Jinan Petrochemical restarted around April 16 after a maintenance which began Feb. 19.

** CNOOC's Huizhou Petrochemical restarted its Phase 2 refinery of 10 million mt/year capacity unit around April 22 after maintenance that began March 4.

** Sinopec's Jinling Petrochemical restarted a 3 million mt/yr CDU and a delayed coker around April 20.

** Sinopec's Changling Petrochemical in central Hunan province restarted around mid-April after 55-day maintenance that began Feb. 19. A total 47 maintenance projects were to be carried out, including whole refining units and some petrochemical units, as well as public utilities. This was the first maintenance after the refinery has been operating for a long haul of four years. Prior to this, the refinery usually carried out works every three years. With the maintenance, the refinery planned to process 6.35 million mt of crude oil in 2021.

** Sinopec Shanghai Petrochemical has shut a 6 million mt/yr CDU and seocndary units for maintenance over April-June. It also shut petrochemical units from March 1 while the refining units, including its two crude distillation units, were to be shut from April 15. Sinopec Shanghai plans to complete the maintenance on June 8.

** Sinopec's Yanshan Petrochemical shut a 8 million mt/yr CDU for maintenance end March that will restart in mid-May.

** Sinopec's Yangtze Petrochemical will shut some secondary units for maintenance over April-May.

** Sinopec's Fujian Refining and Chemical Co. refinery in southeastern Fujian province will shut a 4 million mt/yr CDU for maintenance from mid-October to mid-November.

** Sinopec's Shanghai Gaoqiao refinery will shut for maintenance from end October to early December.

Existing entries

China

** Sinopec's Jiujiang Petrochemical in southern Jiangxi province, has shut its refinery since April 1 for a 45-day scheduled maintenance, according to its official Wechat account. This is the first time that the refinery has been shut for maintenance in the past four years, as the last maintenance was carried out in 2017. About 35 major units will be maintained during the shutdown, it said. Jiujiang Petrochemical has processed about 7.02 million mt of crude in 2020, about 20,000 mt higher than its initial target.

** PetroChina has shut its Fushun refinery in northeast China's Liaoning province since April 5, for a 50-day scheduled maintenance, according to its official Wechat account. The shutdown of the 8 million mt/year crude distillation units on April 5 kicked off the start of the maintenance, it said. The refinery last carried out a 45-day scheduled maintenance over June-July 2017 and expects to carry out the next maintenance five years later.

** PetroChina's Dagang Petrochemical will shut for maintenance over mid-May and end June.

** Sinopec's Qilu Petrochemical will shut a 4 million mt/year CDU for maintenance from mid-August till late September.

** Sinopec's Shijiazhuang Petrochemical will be shut for an overall maintenance over end-August till end-October.

** Sinopec's Cangzhou Petrochemical will shut the entire refinery for maintenance over May 10-June 30.

** PetroChina's Jilin Petrochemical will shut for maintenance over May-June.

** Sinopec's Maoming Petrochemical will shut a 10 million mt/year CDU for maintenance over early-June till mid-July.

** Sinopec's Shijiazhuang Petrochemical will be shut for an overall maintenance over end-August till end-October.

** Sinopec's Guangzhou Petrochemical will shut a 8 million mt/year CDU for maintenance over mid-October-end November.

Japan

** All units were shut at the Wakayama refinery after a fire broke out near the 39,000 b/d fluid catalytic cracker on March 29. It was not immediately clear when ENEOS would be able to restart the units.

** Japan's ENEOS said March 22 it plans to restart the fire-hit sole 136,000 b/d crude distillation unit at its Oita refinery in the southwest in August 2021. The restart of the Oita CDU comes after the investigative committee, including external experts, compiled a final report, which has been accepted by the relevant authorities. ENEOS, which has been transferring oil products from its other refineries in Japan to Oita, will consider the optimal run rate for the group's refineries in an effort to ensure stable supply, following this latest plan for the restart of its Oita CDU, a company spokeswoman said. A fire broke out at ENEOS' Oita CDU on May 26 last year during scheduled maintenance that had started on May 12.

** Japan's Cosmo Oil plans to shut the 75,000 b/d No. 1 crude distillation unit at its 177,000 b/d Chiba refinery in Tokyo Bay as well as the sole 100,000 b/d CDU at the Sakai refinery in western Japan for scheduled maintenance in autumn, a spokeswoman said Feb. 16. The works are expected to last about a month at both units, the spokeswoman added, but declined to add further details.

** Japan's ENEOS shut in late February the two crude distillation units at the Mizushima-B plant in western Japan for scheduled turnarounds. ENEOS' scheduled shutdown of the 95,200 b/d No. 2 crude distillation unit will last until late April, while the 105,000 b/d No. 3 CDU will shut until early June.

** Japanese refiner Fuji Oil plans to shut its sole Sodegaura refinery in Tokyo Bay for a large-scale regular maintenance from mid-May to end-June, a company spokesman said. The large-scale maintenance is carried out once every four years at the refinery, and is expected to last for more than a month, he added.

** Japan's largest refiner ENEOS said it will decommission the 120,000 b/d No. 1 CDU at its 270,000 b/d Negishi refinery in Tokyo Bay in October 2022, bringing down its total refining capacity to around 1.75 million b/d. ENEOS' latest move comes as it has been considering ways to optimize its refining system in Japan in the face of a sharp decline in domestic oil demand, accelerated by the coronavirus pandemic, amid increased competition in Asia. Under the latest development, it will also decommission secondary units attached to the No. 1 CDU, including a vacuum distillation unit and fluid catalytic cracker, the capacities of which were not immediately disclosed. ENEOS will also decommission a 270,000 mt/year lubricant output unit at the Negishi refinery.

Upgrades

Existing entries

** Sinopec's Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer this year and to bring its port upgrading project online by end-December, it said.

** Japan's second-largest refiner, Idemitsu Kosan, plans to start work on raising the residue cracking capacity at its 45,000 b/d FCC as it aims to increase LSFO output. Idemitsu Kosan's upgrade at the Chiba refinery was part of its response to the International Maritime Organization's global low sulfur mandate for marine fuels from January.

** China's Sinopec Luoyang Petrochemical expects the start-up of the 2 million mt/year CDU expansion to be delayed to H1 2021, a refinery source said.

** Axens said its Paramax technology has been selected by state-owned China National Offshore Oil Corp. for the petrochemical expansion at the plant. The project aims at increasing the high-purity aromatics production capacity to 3 million mt/year. The new aromatics complex will produce 1.5 million mt/year of paraxylene in a single train, Axens said. The Huizhou petrochemical complex has been operating an Axens Paramax complex since 2009 with 1.3 million mt/year of aromatics production.

** Construction of a new 1 million mt/year coker at Chinese independent refinery Haiyou Petrochemical, in eastern Shandong, has been put on hold, according to sources close to the refinery. The new coker was expected to come on stream in 2019.

** Sinopec's 21 million mt/year Jinling Petrochemical refinery in eastern China will build a new 600,000 mt/year vacuum distillation unit. It has reconfigured its No. 3 gasoline hydrotreater to a 360,000 mt/year hydrotreater to produce RMG 380 CST bunker fuel oil with sulfur content no higher than 0.5%.

** Sinopec's Zhenhai refinery in Ningbo, eastern Zhejiang province, has issued four tenders for preconstruction works of its 1.2 million mt/year ethylene expansion project. The project also include 15 million mt/year of refining capacity.

Launches

Existing entries

** China's private refining and petrochemical complex Zhejiang Petroleum & Chemical has started trial run in one of its two 10 million mt/year CDU in the phase 2, and is expected to commission the whole phase 2 (20 million mt/year) in 2021. Zhejiang Petroleum & Chemical's phase 3 project is unlikely to launch within the 14th Five Year Plan (2021-2025), market sources and analysts told S&P Global Platts.

** Honeywell said China's Shandong Yulong Petrochemical will use "advanced platforming and aromatics technologies" from Honeywell UOP at its integrated petrochemical complex. The complex will include a UOP naphtha Unionfining unit, CCR Platforming technology to convert naphtha into high-octane gasoline and aromatics, Isomar isomerization technology. When completed Yulong plans to produce 3 million mt/yr of mixed aromatics. Shandong's independent greenfield refining complex -- Yulong Petrochemical -- announced to start construction work at Yulong Island in Yantai city at the end of October, S&P Global Platts has reported previously. The construction work is expected to be completed in 24 months. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province.

According to the preliminary schedule, a total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years. The 10 refiners would also transfer all of their crude import quotas of 13 million mt/year to the new project in Yantai city, eastern Shandong province. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical are the first three refineries to be dismantled this year. Yuhuang Petrochemical and Zhonghai Fine Chemical have been in the process of dismantling, while Jinshi Asphalt has already finished. Major units to be constructed include two 10 million mt/year crude distillation units, two 1.5 million mt/year ethylene crackers, as well as other related units.

** Saudi Aramco has pulled out from a joint project to build a greenfield 300,000 b/d refining and petrochemical complex in northeast China, sources with direct knowledge of the matter told S&P Global Platts on Aug. 21. Aramco originally signed a deal with China's North Industries Group (Norinco) and Panjin Sincen to form Huajin Aramco Petrochemical Co. in February 2019, during a visit by Crown Prince Mohammed bin Salman to Beijing. The JV plans to build a $10 billion integrated refining and petrochemical complex in northeast China's Liaoning province Panjin city with a 1.5 million mt/year ethylene cracker and a 1.3 million mt/year PX unit.

** KBR said it has been awarded a contract for catalyst supply for a vinyl acetate monomer grassroots project at China's Shenghong (Lianyungang) refinery. The 300,000 mt/year unit is a "key intermediate" for the production of polymers and resins for adhesives, coatings, paints, films, textiles and other products. In 2019, the refinery started construction of its 16 million mt/year (320,000 b/d) CDU and 3.1 million mt/year No.1 continuous reformer. Shenghong's refinery will only have one crude distillation unit with a processing capacity of 16 million mt/year, which will become the single largest distillation unit in China. The project is slated for completion in 2021. China's independent Shenghong Group has opened a trading office in Singapore ahead of the start-up in the second half of 2021 of its refinery in Jiangsu province.

** PetroChina officially started construction works at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on Dec. 5, 2018. Trial operations at the refining complex are expected to start in October 2021.

** China's coal chemical producer Xuyang Group has announced plans to build a greenfield 15 million mt/year refining and petrochemical complex in Tangshang in central Hebei province.