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REFINERY NEWS ROUNDUP: China's July oil product exports fall on quota shortages

China's oil product exports fell 28% month on month to 4.64 million mt in July -- a five-month low -- as oil companies cut exports due to quota shortages. China exported 26.29 million mt of gasoline, gasoil and jet fuel in the first half, down 2.6% year on year, according to detailed data by the General Administration of Customs.

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The country's crude imports fell 19.6% year on year to 9.75 million b/d in July, showed GAC's preliminary data released Aug. 7. The inflow was also down 0.6% from 9.81 million b/d imported in June. GAC releases data in metric tons, which S&P Global Platts converts to barrels using a 7.33 conversion factor. On a metric ton basis, July imports rose 2.8% on the month to 41.24 million mt.

Total crude imports in the first seven months of the year fell 5.6% year on year to 301.83 million mt, or 10.44 million b/d, GAC data showed, extending a drop of around 3% in the first six months of the year.

China's Shandong provincial government has asked independent refineries operating in its region to sign commitments to fully abide by the crude import quota rules, in an effort to ensure compliance and clamp down on industry misconduct of the quota usage, market sources have told Platts. The move is also aimed at granting the companies their fair share of quotas in the next round of allocations, the sources added.

"Refiners have been fretting that the government would not grant them the next [third] batch of import quotas [to send out a stern warning to the sector] ... but it looks like the refiners can get their next round of quotas if they sign the commitments and promise to fully comply with the rules [in a transparent manner]," a Shandong-based refining source said.

China's 400,000 b/d Hengli Petrochemical (Dalian) refinery in northeast Liaoning province is expected to receive its third batch of crude import quotas in September, according to a refinery source with knowledge of the matter.

The refinery expects to process a total 21.3 million mt of crudes throughout the year, compared with 22.5 million mt last year.

Sinopec's new 200,000 b/d Zhongke Petrochemical in southern Guangdong province has shipped its first jet fuel export cargo July 27, providing a new outlet to the company's product sales, the refinery said in a news report on its official WeChat account.

New and ongoing maintenance:

Refinery
Capacity b/d
Country
Owner
Unit
Duration
Oita
136,000
Japan
ENEOS
Full
May 2020
Negishi
270,000
Japan
ENEOS
Part
Closure 2022
Chiba
177,000
Japan
Cosmo Oil
Part
Autumn
Sakai
100,000
Japan
Cosmo Oil
Part
Autumn
Kikuma
138,000
Japan
Taiyo Oil
Full
2021/22
Yokkaichi
255,000
Japan
Idemitsu
Part
Back
Aichi
160,000
Japan
Idemitsu
Full
Oct
Sendai
145,000
Japan
ENEOS
Full
Back
Kashima
168,000
Japan
ENEOS
Full
Back
Guangzhou
264,000
China
Sinopec
Full
Autumn
Maoming
360,000
China
Sinopec
Part
June
Shijiazhuang
200,000
China
Sinopec
Full
Aug
Qilu
280,000
China
Sinopec
Part
Aug
Shijiazhuang
200,000
China
Sinopec
Full
Aug
Fujian
280,000
China
Sinopec
Part
Oct
Gaoqiao
260,000
China
Sinopec
Full
Nov
Huajin
120,000
China
Norinco
Full
July

Upgrades:

Zhenhai
230,000
China
Sinopec
Expansion
NA
Jinling
420,000
China
Sinopec
Upgrade
NA
Haiyou
70,000
China
Haiyou
Upgrade
On hold
Huizhou
440,000
China
CNOOC
Upgrade
NA
Luoyang
160,000
China
Sinopec
Upgrade
2020
Chiba
190,000
Japan
Idemitsu
Upgrade
2020
Changling
230,000
China
Sinopec
Upgrade
NA
Qinzhou
240,000
China
Guanxi
Upgrade
2023

Launches:

Tangshang
300,000
China
Xuyang Group
Launch
2021
Jieyang
400,000
China
Guandong
Launch
2021
Huajin Aramco
300,000
China
Joint
Launch
Canceled
Lianyungang
320,000
China
Shenghong
Launch
2021
Yulong
400,000
China
Yulong
Launch
2022
ZPC
800,000
China
Joint
Launch
Launched

Near-term maintenance

New and revised entries

Japan

** Idemitsu Kosan restarted the 155,000 b/d No. 3 crude distillation unit at its Yokkaichi refinery in central Japan July 29 after completing a scheduled maintenance. The company proceeded to restarting secondary units in sequence, with all units scheduled to resume operations by early August.

** ENEOS restarted its sole 168,000 b/d CDU at the Kashima refinery on the east coast July 29 after completing an unplanned maintenance, a company spokesman said July 30. The CDU had been suspended since July 6 due to an electrical system problem.

** Japanese refiner Taiyo Oil shut the 32,000 b/d No. 2 CDU at its sole Kikuma refinery July 15 for a scheduled maintenance, a spokesman said. The company planned to restart the CDU in early August.

** ENEOS restarted July 17 its sole 145,000 b/d CDU at the Sendai refinery in the northeast after completing a scheduled maintenance.

** ENEOS plans to restart the fire-hit sole 136,000 b/d CDU at its Oita refinery in the southwest in mid-August after completing restoration work, a spokeswoman said Aug. 2. A fire broke out at the Oita CDU on May 26 last year during a scheduled maintenance that had started May 12. The fire caused the crude distillation tower at the sole Oita CDU to bend.

China

** China's Zhejiang Petroleum & Chemical shut the third 10 million mt/year (200,000 b/d) CDU at its 20 million mt/year Phase 2 project in late July, due mainly to shortage of crude oil import quotas, according to refinery sources. The third CDU, which started up in November 2020, brought its total operational refining capacity to 30 million mt/year (600,000 b/d).

Existing entries

China

** China's Norinco Huajin in northeastern Liaoning province will shut its refinery for maintenance from around July 15 for one month. The refinery last had a scheduled maintenance over June-July 2018.

** Sinopec's Fujian Refining and Chemical Co. refinery in southeastern Fujian province will shut a 4 million mt/year CDU for maintenance from mid-October to mid-November.

** Sinopec's Shanghai Gaoqiao refinery will shut for maintenance from the end of October to early December.

** Sinopec's Qilu Petrochemical will shut a 4 million mt/year CDU for maintenance from mid-August till late September.

** Sinopec's Shijiazhuang Petrochemical will be shut for an overall maintenance over end-August till end-October.

** Sinopec's Maoming Petrochemical will shut a 10 million mt/year CDU for maintenance between early June and mid July.

** Sinopec's Guangzhou Petrochemical will shut a 8 million mt/year CDU for maintenance between mid-October and the end of November.

Japan

** Japan's Cosmo Oil plans to shut the 75,000 b/d No. 1 crude distillation unit at its 177,000 b/d Chiba refinery in Tokyo Bay as well as the sole 100,000 b/d CDU at the Sakai refinery in western Japan for scheduled maintenance in the autumn. The works are expected to last about a month at both units.

** Japan's Idemitsu Kosan plans to shut the sole 160,000 b/d CDU at its Aichi refinery from October to November.

** Japan's ENEOS said it will decommission the 120,000 b/d No. 1 CDU at its 270,000 b/d Negishi refinery in Tokyo Bay in October 2022. It will also decommission secondary units attached to the No. 1 CDU, including a vacuum distillation unit and fluid catalytic cracker. ENEOS will also decommission a 270,000 mt/year lubricant output unit at the Negishi refinery.

Upgrades

Existing entries

** PetroChina's Guangxi Petrochemical in southern Guangxi province plans to start construction at its upgrading projects at the end of 2021, with the works set to take 36 months. The projects include upgrading the existing refining units as well as setting up new petrochemical facilities, which will turn the refinery into a refining and petrochemical complex. The project will focus on upgrading two existing units: the 2.2 million mt/year wax oil hydrocracker and the 2.4 million mt/year gasoil hydrogenation refining unit. For the petrochemicals part, around 11 main units will be constructed, which include a 1.2 million mt/year ethylene cracker, a 450,000 mt/year HDPE unit and a 500,000 mt/year FDPE unit, as well as other facilities.

** Sinopec's flagship refinery Zhenhai Refining & Chemical will start construction work in October at its phase 2 expansion project, adding another 11 million mt/year of refining capacity as well as 1.5 million mt/year of ethylene plant. Once the project is completed, Zhenhai Petrochemical's primary capacity will rise to 38 million mt/year, with 3.7 million mt/year of ethylene capacity. This follows the completion of the phase 1 expansion project, which was delivered on June 29 2021. Phase 1 project involved setting up a 4 million mt/year CDU and a 1.2 million mt/year ethylene unit, which started construction in April 2020. These new facilities will be integrated with the existing 23 million mt/year CDU as well as 1 million mt/year ethylene plant. In the longer term, the company has the ambition to grow itself into a refining capacity of 60 million mt/year and 7 million mt/year of ethylene by 2030.

** Sinopec's Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer in 2021 and to bring its port upgrading project online by end-December.

** Japan's Idemitsu Kosan plans to start work on raising the residue cracking capacity at its 45,000 b/d FCC at Chiba.

** China's Sinopec Luoyang Petrochemical expects the start-up of the 2 million mt/year CDU expansion to be delayed to H1 2021.

** 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.

** Construction of a new 1 million mt/year coker at Chinese independent refinery Haiyou Petrochemical, in eastern Shandong, has been put on hold.

** Sinopec's Jinling Petrochemical refinery in eastern China will build a new 600,000 mt/year vacuum distillation unit.

Launches

Existing entries

** China's private Shenghong Petrochemical is preparing for official trial runs at Lianyungang on August 26 after the completion of construction of its core facilities on June 30. The core facilities include a 16 million mt/year CDU, sulfur recovery units, naphtha hydrocracker and its crude tanks.

** Chinese privately owned refining and petrochemical complex Zhejiang Petroleum & Chemical is scheduled to start up the second 10 million mt/year CDU at its 20 million mt/year Phase 2 project. It launched the first CDU of the second phase expansion project in November 2020. The refinery first came online in December 2019.

** Honeywell said China's Shandong Yulong Petrochemical will use "advanced platforming and aromatics technologies" from Honeywell UOP at its integrated petrochemical complex. The complex will include a UOP naphtha Unionfining unit, CCR Platforming technology to convert naphtha into high-octane gasoline and aromatics, Isomar isomerization technology. When completed Yulong plans to produce 3 million mt/yr of mixed aromatics. Shandong's independent greenfield refining complex, Yulong Petrochemical announced the start of construction work at Yulong Island in Yantai city at the end of October 2020.

Construction work is expected to be completed in 24 months. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province. A total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical, Yuhuang Petrochemical and Zhonghai Fine Chemical will be dismantled, while Jinshi Asphalt has already finished dismantling.

** Saudi Aramco has pulled out from a joint project to build a greenfield 300,000 b/d refining and petrochemical complex in northeast China. Aramco originally signed a deal with China's North Industries Group (Norinco) and Panjin Sincen to form Huajin Aramco Petrochemical Co. in February 2019. The joint venture planned to build an 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.

** PetroChina officially started construction works at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on Dec. 5, 2018.

** 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.