REFINERY NEWS ROUNDUP: Run rates edge up at China's state-owned refineries in Nov

London — China's state-owned refineries planned to increase crude throughputs in November by an average of one percentage point month on month to 79.8% of capacity, data collected by S&P Global Platts showed.

The state-owned oil giants' 39 refineries -- 20 Sinopec refineries, 17 PetroChina refineries, CNOOC's Huizhou Petrochemical and Sinochem's Quanzhou Petrochemical -- planned to process 7.07 million b/d of crude in November, accounting for 79.8% of their combined nameplate capacity of 8.86 million b/d.

China's independent refineries planned to keep run rates broadly unchanged from October, except Zhejiang Petroleum & Chemical, which raised throughput as part of trial runs at its new 10 million mt/year CDU.

At the same time, the 20 million mt/year Hengli Petrochemical (Dalian) refinery in northeastern China kept run rates steady on the month at around 105% of capacity.

Crude and bitumen blend imports for China's independent refineries in November fell further by 19.2% to a seven-month low of 13.998 million mt, or 3.4 million b/d, from October due to quota shortages towards the year-end, information collected by S&P Global Platts showed on Dec. 3.

Almost all private refineries received fewer cargoes compared to previous months because they have almost run out of quotas.

Separately, PetroChina's 20.5 million mt/year flagship Dalian Petrochemical refinery in northeastern Liaoning province, will reduce its gasoil exports in December. The refinery plans to export 240,000 mt of gasoil in December, a 25% month-on-month drop from 320,000 mt in November. The demand for low-vapor gasoil in northeastern China has remained strong as temperatures are low during winter, industry sources said.

China's 200,000 b/d West Pacific Petrochemical Corp. refinery in the northeastern Liaoning province, plans to export about 280,000 mt of oil products in December. This will be steady from November, when 140,000 mt of gasoline and 140,000 mt of gasoil were exported. The refinery will continue to skip exports of jet fuel due to sluggish overseas demand.

PetroChina's 110,000 b/d Daqing Refining and Petrochemical refinery in northeastern Heilongjiang province plans to export 30,000 mt of gasoline in December. The volume is stable from both November and October.

Japan's oil product output rose 8.7% week on week to 18.88 million barrels over Nov. 29-Dec. 5, supported by increased naphtha, middle distillate and fuel oil production, the Petroleum Association of Japan said Dec. 9.

Japan's oil products stocks retreated 1.4% week on week at 71.05 million barrels on Dec. 5, the Petroleum Association of Japan said Dec. 9.

NEW AND ONGOING MAINTENANCE, UPGRADES UPDATE

UPGRADES

LAUNCHES

Near-term maintenance

New and revised entries

China

** PetroChina's Yunnan Petrochemical refinery in southwestern Yunnan province, shut the whole refinery for a 50-day maintenance, according to a company source. The refinery will be shut from Dec. 5 to last till end-January. The refinery aims to operate for another four years once the maintenance is completed, it said on its official Wechat account. This will be the first overall maintenance at the refinery since it launched commercial operations from August 2017. The run rates at the refinery will drop to 16% because of the maintenance this December, as only 180,000 mt of crudes will be processed this month.

** Sinopec's Changling Petrochemical in central Hunan province, will shut for a 55-day maintenance from around Feb. 19 2021, the refinery said on its official Wechat account. A total of 47 maintenance projects will be carried out when the refinery is shut in February, including the whole refining units and some petrochemical units, as well as the public utilities. This will also be the first maintenance after the refinery has been operating for a long haul of four years. Prior to this, the refinery usually had maintenance every three years.

** Sinopec Shanghai Petrochemical has stopped production of International Maritime Organization-complaint marine fuel at its refinery due to a scheduled maintenance of its 3.9 million mt/year residual hydrotreater, a company source said on Nov. 26. "We don't produce VLSFO in November, neither in December as I know," the source said. The plant shut its 3.9 million mt/year residual hydrotreater in late October for a 50-day maintenance period, the source said. The unit was partially shut in April for 40 days to replace the catalyst, leading to VLSFO suspension in that month.

** Sinopec's Jinling Petrochemical shut an 8 million mt/year CDU as well as some secondary units for about 40 days of maintenance since Nov. 18.

** Sinopec's Wuhan Petrochemical is due to restart around Dec. 15 from two months of maintenance since October.

** Sinopec's Qingdao Petrochemical plant is in the process of restart from scheduled maintenance that began Oct. 10 and will be fully back around December 13.

Japan

** Japan's ENEOS shut the 95,200 b/d No. 2 CDU at its Mizushima-B plant in western Japan on Nov. 4, a company spokeswoman said. The spokeswoman said the CDU's shutdown was not part of a scheduled turnaround, but declined to cite a reason or when it plans to restart.

** Japan's ENEOS said Dec. 8 that it has restarted its sole 127,500 b/d CDU at the Wakayama refinery in the western Japan after completing scheduled maintenance. It was shut on Sept. 27 until early December for a scheduled turnaround.

Existing entries

China

** Sinopec's Qilu Petrochemical, which shut its 8 million mt/year CDU and some secondary units for a partial turnaround in September, has restarted some of the units, according to refinery sources. The maintenance started from Sept. 10. The whole refinery is due back online around mid December. Given the ongoing maintenance, the refinery plans to process 850,000 mt of crude this month and processed 520,000 mt in October.

** 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.

Japan

** 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.

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 Luoyang Petrochemical expects the startup 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, 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 private refining and petrochemical complex Zhejiang Petroleum & Chemical started up one of its two 200,000 b/d crude distillation units at its 400,000 b/d Phase II refinery on Nov. 1. ZPC's average utilization rate for three of its 10 million mt/year CDUs was 83% in November, according to a company source. This translates to about 2 million mt of crude throughput in the month, up about 9.5% from October. Refinery engineers said a new CDU under trial operations should run above 50% of capacity, which is likely to be the rough utilization rate of ZPC's new CDU that was undergoing trial runs in November ahead of starting up. This could lead the utilization rate of the existing two CDUs -- with a combined capacity of 20 million mt/year -- to be at about 100% in November compared to 110% in October.

Existing entries

** China's Shandong's independent greenfield refining complex -- Yulong Petrochemical -- has announced to start construction work at Yulong Island in Yantai city, according to a local report. This will be the latest and biggest greenfield refinery to be built up by the independent sector in Shandong, which is home to the country's vast small and medium sized independent refineries with a combined capacity of over 130 million mt/year. The construction work at the 20 million mt/year refining complex, with an investment of around Yuan 127.4 billion ($18 billion), is expected to be completed in 24 months.

The project, which has been approved by the Premier Li Keqiang during his visit in Yantai over June 1-2, will help transfer the outdated refining capacity into this new one. 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 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.