REFINERY NEWS ROUNDUP: China's April runs up, March gasoline, gasoil exports hit highs

London — China's refinery throughput is likely to recover by 8% in April on the month to 12.8 million b/d, as both state-owned and independent refineries lifted their utilization rate amid good domestic margins, a monthly S&P Global Platts survey showed.

"The refining margin is good now, and it's the best time for refineries," a source with an independent refinery in Northeast China said.

Crude oil throughput at China's domestic refineries dropped 6.6% year on year to 11.83 million b/d in March amid the spread of COVID-19, data released by the National Bureau of Statistics, or NBS, showed. This was most likely the lowest monthly throughput since December 2017 when it stood at 11.67 million b/d, according to the NBS data. But the March throughput had possibly recovered from a deeper decline in February, when the country was under lockdown following the outbreak of the coronavirus.

China's gasoil and gasoline exports went up 4.4% and 7.8% year on year in March, respectively, to hit record highs, because the country shipped more cargoes overseas to offset inventory pressure on weak domestic demand.

But with economic activities resuming, demand has returned in April and domestic gasoil sales have strengthened, refining sources said. As a result, independent refineries, which are focused on the domestic market, boosted their throughput to levels higher than the pre-COVID-19 levels.

--The 20 million mt/year Hengli Petrochemical (Dalian) independent refinery was operating at around 115% in April, up from around 100% in March, a company source said.

--The 20 million mt/year Zhejiang Petroleum and Chemical, or ZPC, in eastern Zhejiang province, has raised run rates to around 120% in April from around 110% in March.

--Independent refineries in eastern Shandong province lifted their average run rates to 70.6% as of April 22, from 59% in March and 44% in February, according to data from local energy information provider JLC.

--Sinopec led the throughput recovery in April, raising its run rates to 80% in April from 72% in March and 64% in February. A total 16 out of the 19 surveyed refineries under Sinopec have lifted utilization rates in April, compared with 11 refineries out of 19 in March. Only three polled refineries have cut run rates slightly in April from March. They are: Zhenhai Petrochemical; Maoming Petrochemical; and Dongxing Petrochemical.

--PetroChina lifted run rates to around 68% of nameplate capacity in April, from about 64% in March -- a 36-month low.

--CNOOC's Huizhou refinery in southern Guangdong province, cut run rates slightly to around 88% in April, from around 91% last month.

--Sinochem's Quanzhou refinery kept its run rates at 85% in April, unchanged from levels in March, a refinery source said.

--Japan's crude throughput rebounded 1.2% week on week to 2.69 million b/d over April 12-18, the Petroleum Association of Japan said. The April 12-18 crude throughput remained the lowest in 46 weeks. It was last lower at 2.58 million b/d over May 26-June 1 during the spring refinery turnaround season. The April 12-18 crude throughput volume dropped 14% from 21.95 million barrels in the corresponding week a year ago, according to S&P Global Platts data. The latest weekly figure points to a refining capacity utilization rate of 76.5%, based on Japan's utilized design capacity of 3.5188 million b/d, up from 75.6% a week ago.

--Japanese refiners and traders now expect the Golden Week gasoline demand to drop as drivers will be restrained from going out during one of Japan's peak driving seasons, pressuring some refiners to cut runs further in coming weeks. Golden Week typically runs from late April to early May.

--Japan's largest refiner JXTG Nippon Oil & Energy said it had shut a part of rack oil product shipments facility at Kawasaki for tank lorry shipments as part of its preventive measures against the coronavirus pandemic. JXTG's partial suspension of the Kawasaki lorry shipment facility came just days after it had announced two COVID-19 tested positive cases at the refinery on April 14.

NEW AND ONGOING MAINTENANCE, UPGRADES UPDATE

UPGRADES

LAUNCHES

Near term maintenance

New and revised 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.

--Japanese refiner Cosmo Oil planned to start scheduled maintenance program at the Chiba refinery in Tokyo Bay on April 18, Takashi Tsukioka, president of the Petroleum Association of Japan, said at a news conference Friday, without elaborating. Cosmo Oil's scheduled maintenance program at the Chiba refinery will involve the shutdown of the the 102,000 b/d No. 2 crude distillation unit at the refinery in April.

--Japanese refiner Idemitsu Kosan said it had restarted all refining units at its fire-hit Keihin refinery in Tokyo Bay on April 20. The restart of all refining units at the fire-hit Keihin refinery comes following the completion of restoration works as of April 7, the company said. The restart came after Idemitsu Kosan, Japan's second-largest refiner, said on February 7 that it had expected its Keihin refinery to remain shut at least until the end of March, having been shut since late December 2019 due to a fire. The fire started on December 24, 2019, at the 27,000 b/d coker at the refinery, which is operated by Toa Oil, part of the Idemitsu Kosan group. The coker and other related units were immediately shut and subsequently all other units, including the sole crude distillation unit, were closed over December 25-27.

--In June, Idemitsu Kosan plans to shut its 150,000 b/d Hokkaido refinery in northern Japan for scheduled maintenance, Chairman Takashi Tsukioka said. Idemitsu's scheduled maintenance at the Hokkaido refinery is expected to last more than one month.

China

--Sinopec's Jinling Petrochemical started up its 1.5 million mt/year FCC, and a 600,000 mt/year gasoline hydrotreater, which were halted in February due to slow gasoline sales. In March, it started up its 8 million mt/year crude distillation unit, 2.5 million mt/year gasoil hydrotreater, and 2 million mt/year gasoil hydrotreater in March, which were also shut down in February when product demand evaporated.

--Sinopec Shanghai Petrochemical has stopped production of IMO-complaint marine fuel at its refinery due to a scheduled maintenance of its 3.9 million mt/year residual hydrotreater, a company source said. "Half of the residual hydrotreater is shut for a 40-day maintenance, which will end on April 23, so no VLSFO production this month," the source said. Shanghai Petrochemical was the first refinery in China to produce low sulfur marine fuel, according to Sinopec News Network, the company's official news agency. Sinopec Shanghai Petrochemical also shut its 3.5 million mt/year CDU in March for maintenance.

Existing entries

China

--Sinopec Tianjin Petrochemical will 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.

--Sinopec Wuhan Petrochemical will shut its 3.5 million mt/year CDU, and a 5 million mt/year CDU for maintenance from late April to July.

--PetroChina's Fushun Petrochemical will shut for maintenance from June 1 to July 10.

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

--At China's Hengli Petrochemical (Dalian) one reformer was idled for maintenance and there is no date to resume production, a source said. The refinery has three reformers, with capacity of 3.2 million mt/year each.

--China's Sinopec Anqing refinery in central Anhui province planned to restart three idled refining units in April, depending on the recovery of oil demand in the local market. The refinery had shut three units -- a 4 million mt/year crude distillation unit, a 1.4 million mt/year fluid catalytic cracking unit and a 1 million mt/year delayed coker -- gradually in the first half of February due to manpower shortage and reduced demand after the coronavirus outbreak.

--PetroChina's Lanzhou Petrochemical Company in northwestern Gansu province has shut two more secondary units in March, due to the weak demand for oil products in the region, a refinery source told S&P Global Platts. The newly shut units are a 600,000 mt/year jet fuel hydrotreater, and a 60,000 mt/year MTBE unit. Prior to this, the refinery had shut a 1.2 million mt/year gasoil hydrogenation unit around February 4, due to weak gasoil sales. It is not clear when these units will resume operations, the source said. In addition, the refinery planned to process 730,000 mt of crudes in March, or 82% of its nameplate capacity, compared with 70% of its nameplate capacity in February.

--China's West Pacific Petrochemical Corp., or WEPEC, refinery in northeastern Liaoning province has shut its 2.2 million mt/year residual hydrogenation unit in early March for maintenance, a source said, adding the works will last for 21 days. The shutdown of the unit has kept the refinery's run rate at around 79%, mostly steady compared with February, when the refinery cut throughput due to weakening demand reflecting the impact of the coronavirus outbreak.

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

--Sinopec Zhenhai Petrochemical shut its 8 million mt/year CDU and 1.8 million mt/year FCC over mid-March to early May for maintenance.

--Sinopec Beihai Refining and Petrochemical shut the entire refinery for works from mid-March until mid-May.

--PetroChina's Dalian Petrochemical in northeastern Liaoning province shut for an overall maintenance over March 25-May 25, for around two months.

--Sinopec's Yanshan Petrochemical shut its 3 million mt/year CDU and 2 million mt/year FCC for maintenance from late March to early May.

Japan

--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.

Upgrades

New and revised entries

--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.

Existing entries

--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

--Sinopec plans to start up its greenfield 10 million mt/year (200,000 b/d) Zhongke (Guangdong) refinery in Zhanjiang, southern Guangdong province in April 2020, a Sinopec refinery source said. Construction works at the Zhongke (Guangdong) refinery complex, which have begun since April 2018, are scheduled to be completed be December 2019, Platts reported earlier. The Zhongke refinery complex involves building a 10 million mt/year crude distillation unit, 4.2 million mt/year fluid catalytic cracking unit, 4.4 million mt/year residual oil hydrotreater, 2 million mt/year hydrocracker, 2 million mt/year gasoil hydrotreater, 1.8 million mt/year continuous reforming unit, 2 million mt/year light-hydrocarbon reclaiming unit and associated facilities. Besides, it also includes building an 800,000 mt/year ethylene steam cracking unit, 400,000 mt/year pyrolysis gasoline hydrogenation, 550,000 mt/year polypropylene, 350,000 mt/year high density polyethylene, 250,000 mt/year EO, 400,000 mt/year EG, 100,000 mt/year EVA, 180,000 cu m/hour coal-to-hydrogen units, a power station and other utilities and facilities.

--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 and acquiring a stake in the greenfield Zhejiang Petrochemical refinery and petrochemical complex.

--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.