REFINERY NEWS ROUNDUP: China's Sept crude runs marginally down

London — China's domestic refineries processed 14.01 million b/d of crude oil in September, edging down 0.4% month on month and extending a slight downtrend since hitting a record high in June, due to high product inventory, National Bureau of Statistics data released Oct. 19 showed.

The country's crude throughput hit an all-time high of 14.14 million b/d in June, before edging down to 14.08 million b/d in July and 14.06 million b/d in August, NBS data showed.

China's independent refineries' crude and bitumen blend imports recovered in September, rising 1.6% to 18.14 million mt, or 4.43 million b/d, from a three-month low of 17.85 million mt in August, information collected by S&P Global Platts showed Oct. 14. However, import volumes are unlikely to rise further in October.

This is the fourth time that Chinese independent refineries' crude and bitumen imports have crossed the 18 million mt mark, having hit a record high 19.81 million mt, or 4.68 milion b/d, in July, Platts data showed.

The month-on-month rise was due mostly to Zhejiang Petroleum & Chemical, which received 422,000 mt more crude in September than in August, totaling 2.444 million mt. ZPC is likely to maintain its imports at these high levels as it is expected to complete construction of its 20 million mt/year phase 2 project and start trial runs by the end of the year. The company has applied for an additional 4 million mt of crude imports quota for 2020.

NEW AND ONGOING MAINTENANCE, UPGRADES UPDATE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

Japan

** Japan's refiner Cosmo Oil restarted the sole 100,000 b/d crude distillation unit at its Sakai refinery in western Japan on Sept. 20, a company spokeswoman said. According to the spokeswoman, Cosmo had shut the CDU on Sept. 3.

** Japan's largest refiner ENEOS shut the sole 127,500 b/d crude distillation unit at its Wakayama refinery in west Japan on Sept. 27 until early December for a scheduled turnaround, a company spokeswoman said.

China

** China's Sinopec-SK Wuhan Petrochemical shut its refinery in central Hubei province Oct. 15 for scheduled maintenance, a refinery source said. Maintenance of the entire refinery will last for two months until mid-December, the source said.

Existing entries

Japan

** Japanese refiner Cosmo Oil shut the sole 86,000 b/d crude distillation unit at its Yokkaichi refinery in central Japan on Oct. 1 for about a month-long scheduled turnaround, a company spokeswoman for parent Cosmo Energy Holdings said Oct. 2.

** ENEOS shut the 120,000 b/d No. 1 CDU at its Negishi refinery in Tokyo Bay on Sept. 25 until early November for a scheduled turnaround. ENEOS is also currently in the midst of scheduled maintenance at its 150,000 b/d No. 4 CDU at its Negishi refinery until late October.

** ENEOS said Sept. 29 it will suspend refining operations at the Osaka refinery on Sept. 30 and turn the facility into an asphalt-fueled power plant on Oct. 1. The move comes as its JV with PetroChina International -- known as Osaka International Refining Company, or OIREC, which runs the export-oriented 115,000 b/d Osaka refinery in western Japan -- expires at the end of September. ENEOS and PetroChina International, however, have finalized a deal to hand over their JV at the former's Osaka refinery to the Chiba refinery in December 2020, utilizing the refinery's export capacity for the Asia-Pacific market. Under the final deal, PetroChina International will be in charge of entire crude oil procurement for the export-oriented 129,000 b/d Chiba refinery in Tokyo Bay as well as exporting entire oil products output, with ENEOS taking charge of refining operations.

** Japanese refiner Seibu Oil shut Aug. 27 the sole 120,000 b/d crude distillation unit and other facilities at its Yamaguchi refinery in the west of the country for scheduled maintenance until Oct. 20.

** Due to the coronavirus pandemic, Japanese refiner Taiyo Oil postponed works at Kikuma that would have involved shutting down the CDUs to 2021 or the year after to coincide with large-scale regular repairs.

** ENEOS will take more than one year to resume operations at the sole 136,000 b/d crude distillation unit at its Oita refinery in the southwest of Japan after it was hit by a fire May 26, 2020, a company official said June 18. The fire broke out during maintenance works, which started May 12.

China

** Sinopec's Qilu Petrochemical has shut its 8 million mt/year CDU and some secondary units for a partial turnaround at its facility in eastern Shandong province, a refinery official said. The maintenance, which started from Sept. 10, will last for about 45 days, the source said. Given the ongoing maintenance, the refinery plans to process 620,000 mt of crude, or 64% of its nameplate capacity, down from 84% last month.

** China National Offshore Oil Corp. plans to shut for maintenance its Huizhou refinery in southern Guangdong province for around two months over March-April 2021, a refinery official said. This will be delayed from the initial maintenance schedule of October-December. The second phase of the refinery, with a CDU capacity of 10 million mt/year, as well as secondary units, will also be shut. Meanwhile, CNOOC Huizhou refinery plans to process 1.7 million mt of crude oil in September, or 94% of its nameplate processing capacity, unchanged from last month.

** PetroChina's Yunnan Petrochemical in southwestern Yunnan province will postpone its scheduled maintenance from its initial plan of October to December, according to a refinery official. The refinery will be shut for an overall maintenance over Dec. 10, 2020-Jan. 30, 2021, which will be the the refinery's first overall maintenance since it first started operations in August 2017. In addition, Yunnan Petrochemical in southwestern China said on its WeChat platform that it will lower its crude runs drastically in September. The Yunnan plant processed 1.1 million mt of crude at 100% of its utilization rate, which was the highest level since its launch in August 2017, and it may not reach this rate again in the coming months, the refinery official said.

Upgrades

Existing entries

** 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 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/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, 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

Existing entries

** China's Zhejiang Petroleum & Chemical has applied for 4 million mt of additional crude oil import quota to start up its new 400,000 b/d Phase II refinery in December, sources with knowledge of the matter said. ZPC's new capacity -- which is under construction in a free-trade zone in China's eastern Zhejiang province and targeted to start up in December -- will double ZPC's total refining capacity to 800,000 b/d. "Crude quotas will not be a problem to start up the new phase," a source with ZPC said. ZPC has been allocated a total of 20 million mt of crude quotas so far this year to cover feedstock demand from its 400,000 b/d Phase I plant. Once the 4 million mt additional quota is allocated, the quota volume for September-December would be 10.55 million mt. The volume for the rest four months was likely more than enough to cover ZPC's feedstock demand given that utilization rate at its Phase I refinery fell to 110% in September, from slightly below 120% in August and around 130% in July. ZPC began to construct the phase I plant in late 2016 and started one of its CDUs in late January last year. It gradually started up most of its refining facilities in Phase I, including the other CDU, in December 2019.

** 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.

** China's independent refining sector is poised to cut back on crude oil imports from August as multiple private refineries are scheduled to dismantle their crude distillation units and hand over the capacities to a new 20 million mt/year project, industry sources told S&P Global Platts. The Shandong provincial government had previously set the startup target for the Yulong mega refining complex in Yantai city, eastern Shandong province, as 2022. The Yulong mega project has only recently received the green light from the country's top planner National Development and Reform Commission to start planning for the construction in June. The project aims to consolidate and upgrade mostly small-scale and scattered independent refinery systems in the province in a bid to compete with new giant complexes. These include the 20 million mt/year Hengli Petrochemical (Dalian), the 20 million mt/year Zhejiang Petroleum & Chemical, Shenghong Petrochemical, as well as state-run PetroChina's Guangdong Petrochemical and 10 million mt/year Sinopec Zhongke Petrochemical.

** KBR said it has been awarded a contract for catalyst supply for a vinyl acetate monomer VAM 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 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.