China's oil giant PetroChina has started constructing a low sulfur bunker fuel oil project with 2.6 million mt/year production capacity at its upcoming Guangdong Petrochemical, a company source told S&P Global Commodity Insights April 5.
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The project will further push up China's LSFO production, which jumped 58.4% year on year to 2.27 million mt in January-February, according to data from local information provider JLC.
The source said the 20 million mt/year Guangdong Petrochemical is designed to process heavy crude with higher residual yield than the recent new refineries which crack medium crudes.
The plant will expand its storage capacity by adding four of 20,000 cm tanks for the LSFO project, the source added.
China is set to boost its bonded bunker fuel oil supplies as raising the quotas for bunkering at Chinese bonded ports by 30% to 6.5 million mt in the first round allocation for 2022.
PetroChina won 2.03 million mt in the round, up 36.2% year on year.
The oil giant targets to commission the 20 million mt/year Guangdong Petrochemical by end-2022, helping to buoy the country's crude appetites along with the private 16 million mt/year Shenghong Petrochemical and Zhejiang Petroleum & Chemical's 20 million mt/year expansion.
PetroChina targeted to lift its throughput by 3.6% year on year to 3.48 million b/d in 2022, S&P Global reported.
The Guangdong plant is PetroChina's latest greenfield integrated refinery in southern China Jieyang city, featured with a 2.6 million mt/year aromatics unit and a 1.2 million mt/year steam cracker.
Guangdong Petrochemical was initially proposed in 2011 and scheduled to be built by a 60:40 joint venture between PetroChina and Venezuela's state-run PDVSA. It was designed to process only Venezuelan Merey 16 crude or diluted crude oil.
But the project was stalled partly due to debt-ridden PDVSA having lost the ability to raise funds.
PetroChina subsequently adjust its crude slate design in March 2018 to process Basrah Heavy crude from Iraq and heavy crude oil from Iran, as well as Merey 16.