REFINERY NEWS ROUNDUP: Crude throughput recovers in China, low utilization in Japan

London — Crude oil throughput at China's domestic refineries further recovered to 13.69 million b/d, jumping 8.2% year on year, to post the first uptick since the coronavirus pandemic, data from the National Bureau of Statistics showed.

The strong year-on-year increase in May brought throughput in the first five months of the year to 12.61 million b/d. As a result, the throughput decline in the first five months of the year narrowed to 1.7% on a barrels-per-day basis from 4.2% in January-April. The International Energy Agency meanwhile forecast a full recovery in refinery runs in China in the second half of 2020 and into 2021.

Japan's crude throughput over June 7-13 retreated 2.3% week on week to 1.87 million b/d, with refinery utilization decreasing to 53.3% of capacity, the Petroleum Association of Japan said June 17. June 7-13 crude throughput fell from the week before after marking the first week-on-week increase in seven weeks in the previous week to June 6 as Idemitsu Kosan on June 11 shut the sole 150,000 b/d crude distillation unit at its Hokkaido refinery for scheduled maintenance. Cosmo Oil on June 13 restarted the 102,000 b/d No. 2 CDU at its 177,000 b/d Chiba refinery in Tokyo Bay after completing scheduled maintenance.

Japan's oil product output came in at 13.55 million barrels in the week over June 7-13, up 3.5% from 13.09 million barrels the week before, data released June 17 by the Petroleum Association of Japan showed. The products output plunged 24.1% from a year earlier, S&P Global Platts data showed.

Japan Airlines plans to boost its July jet fuel loading volumes by 40% from June on the back of further demand recovery expectations, a company official told Platts June 17. JAL's planned hike in its jet fuel loadings in July is up from a 6% month-on-month increase in June, according to the JAL official. JAL's jet fuel outlook comes as it sees its domestic flight demand recovering to a year-on-year fall of 70% in July, compared with the year-on-year plunge of 80% in June and 90% in May.

Japanese refiner Taiyo Oil will keep its sole Kikuma refinery in western Japan running at around 60% capacity during June-July when it had earlier planned scheduled maintenance, a source with direct knowledge of the matter said. Taiyo Oil had earlier planned to shut the 106,000 b/d No. 1 CDU at the refinery from early June and then shut the 32,000 b/d No. 2 CDU throughout July after having finished work on the No. 1 CDU. The company postponed repairs that involve shutting down the CDUs in the wake of the coronavirus pandemic, but is currently conducting some of the statutory inspections with the CDUs still running. "We only carry out inspections that are legally required and that cannot be postponed. However, for other inspections, we plan to carry out next year or two years later at the time of large-scale regular repairs," the source said June 11. The reason for reducing the run rate to about 60% until the end of July is that the company had reduced the amount of crude oil procured in consideration of scheduled repairs, so the amount of crude oil that can be processed is lower, the source said. With such low run rates, the inventory of oil products accumulated in preparation for periodic repairs is gradually decreasing, he added.

NEW AND ONGOING MAINTENANCE, UPGRADES UPDATE

UPGRADES

LAUNCHES

Near term maintenance

New and revised entries

Japan

--Japanese refiner Idemitsu Kosan on June 15 started scheduled maintenance at Hokkaido in northern Japan until mid-September after having shut the sole 150,000 b/d crude distillation unit on June 11, a company spokesman said.

--Japanese refiner Taiyo Oil will keep running its sole 138,000 b/d Kikuma refinery in western Japan at around 60% capacity during June-July when it had earlier planned scheduled maintenance. Taiyo Oil had earlier planned to shut the 106,000 b/d No. 1 crude distillation unit at the refinery from early June and then shut the 32,000 b/d No. 2 CDU throughout July after having finished work on the No. 1 CDU. The company postponed the repairs that involve shutting down the CDUs in the wake of the coronavirus pandemic, but is currently conducting some of the statutory inspections with the CDUs still running. "We only carry out inspections that are legally required and that cannot be postponed. However, for other inspections, we plan to carry out next year or two years later at the time of large-scale regular repairs," a source said June 11.

--Japanese refiner Cosmo Oil restarted June 16 its No.1 - 75,000 b/d crude distillation unit at the Chiba refinery in Tokyo Bay after completing a brief scheduled turnaround. Cosmo Oil said on June 15 that it has restarted the 102,000 b/d, No.2 crude distillation unit at Chiba refinery after completing scheduled maintenance.

--Japan's Idemitsu Kosan restarted June 15 one of its two crude distillation units at Yokkaichi refinery in central Japan, following a scheduled shutdown on May 20, a company spokesman said June 16. The Yokkaichi CDU had been shut following an unexpected shutdown of a continuous catalyst regeneration, or CCR, unit on May 19. Idemitsu restarted the Yokkaichi CCR on June 16, but the company is still investigating into cause of the CCR shutdown, the spokesman added.

--Japan's JXTG Nippon Oil & Energy's will take more than one year to resume operations at its sole 136,000 b/d crude distillation unit at its Oita refinery in the southwest of Japan after it was hit from a fire May 26, a company official said June 18. The fire broke out during maintenance works, which started May 12. The crude distillation tower at the sole CDU was bent from around the middle by the fire.

China

--PetroChina's Lanzhou Petrochemical Company in northwestern Gansu province, which shut for a scheduled full maintenance from end-April, is now back on line.

--Sinopec Shanghai is back on line after a minor maintenance. It halted a residual hydrotreater in April.

--China's Sinopec Zhenhai Refining & Chemical is expected to complete a turnaround at a 10 million mt/year CDU at its integrated complex in July or August, after it was shut early June. The refiner had shut the 10 million mt/year CDU for maintenance after restarting its 8 million mt/year CDU early May, S&P Global Platts previously reported. --The 8 million mt/year CDU and 1.8 million mt/year fluid catalytic cracking unit were shut for a turnaround between mid-March and early May, but it is unclear whether the FCC has resumed operations. The refinery is slated to undergo a major overhaul this year that involves 39 units, and the turnaround program is divided into two phases, the group company had said mid-March.

Existing entries

Japan

--Japan's JXTG Nippon Oil & Energy shut its 170,000 b/d No. 2 crude distillation unit at its Kawasaki refinery in Tokyo Bay for a scheduled turnaround from April 18 until early July, a company spokesman said. JXTG is currently running scheduled maintenance program at its 65,000 b/d No. 3 CDU at Kawasaki refinery in Tokyo Bay until late June.

--Japan's largest refiner JXTG Nippon Oil & Energy has decided to terminate its refining operations at the 115,000 b/d Osaka refinery in western Japan and turn the facility into an asphalt-fueled power plant in October 2020, it said.

China

--PetroChina's Fushun Petrochemical will shut for a full turnaround over late June to mid-August.

--PetroChina's Ningxia Petrochemical will shut for a full turnaround over July 1-August 15.

--PetroChina's Yunnan Petrochemical will shut for a full turnaround from around mid-October.

--Sinopec Tianjin Petrochemical shut its 2.5 million mt/year CDU, and a 10 million mt/year CDU for maintenance from late April or early May, to last until July.

--PetroChina's Jinxi Petrochemical will shut for a full turnaround from June 25 to August 27.

--PetroChina's 5 million mt/year Dagang Petrochemical will shut for maintenance from May 1 for a turnaround until July 1.

--PetroChina's Dalian Petrochemical in northeastern Liaoning province shut a CDU in early April, ushering in the start of an overall maintenance at the refinery that will last for around two months.

Upgrades

Existing entries

--China's Sinopec is looking to start commercial operation at its four newly built units in the central China located Luoyang Petrochemical in August, but the startup of the 2 million mt/year CDU expansion would be delayed to H1 2021, a refinery source said. The newly built residual hydrotreater, continuous reformer, aromatics extraction unit and hydrogen concentration unit have completed construction and were delivered May 30 to turn into commissioning, the company's official media Sinopec News reported. The project will facilitate the refinery to crack high sulfur crude oil in addition to current sweet crudes preference, and to extract every barrel into profit. Luoyang Petrochemical usually crack crudes from Middle East, West Africa, Latin America, and occasionally processes US crudes like WTI Mid-land, Mars, the 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/yr. The new aromatics complex will produce 1.5 million mt/yr 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/yr of aromatics production.

--Construction of a new 1 million mt/yr 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 Jingmen Petrochemical in central Hubei province targets to start up its newly built 2.8 million mt/year heavy oil catalytic cracker on May 30, which is the key project for the refinery in 2020, according to the company's official social wechat platform. The 200,000 mt/year alkylation unit and the 550,000 mt/year lubricant hydrogenation unit have been online in H2 2019, according to company wechat. The alkylation unit was started up in July/August, and the lube unit in November.

--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, China, has issued four tenders for pre-construction works of its 1.2 million mt/year ethylene expansion project. The project also includes 15 million mt/year of refining capacity.

Launches

New and revised entries

--China's Sinopec has officially started up its greenfield 10 million mt a year Zhongke (Guangdong) refinery in Zhanjiang, Sinopec said on its WeChat platform on June 16. The 10 million mt/year crude distillation unit, 1.5 million mt/year kerosene hydrotreater and other four core facilities were successfully fed with feedstocks, signaling Zhongke's official startup, Sinopec said on WeChat. The CDU and kerosene hydrotreater were initially ignited to heat up on May 30, which was a step toward starting. Sinopec expected the new integrated plant to produce its first batch of on-spec oil product from all the refining units by end-July, and petrochemical products by end-August, according to the WeChat platform. Sinopec added that the project is crucial for the company developing a refining and petrochemical base in the Zhanjiang and Maoming region, helping the refiner to optimize its product and feedstock slate. Zhongke received its first crude cargoes -- 633,063 barrels of Arab Light and 683,470 barrels of Arab Heavy -- on May 8 from its newly built VLCC terminal.

Existing entries

--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 320,000 b/d refinery in Jiangsu province. 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.

--Saudi Aramco is boosting its downstream investments in China, creating a joint venture to build a $10 billion refinery.

--PetroChina officially started construction work at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on December 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.