China’s primary crude processing capacity will be capped at 20 million bpd by 2025, according to an official plan to achieve peak emissions by 2030. The state council, which published the plan, said major refining units should raise their utilisation rate to over 89%, without providing further details. The council also called for the phase-out of outdated petrochemical units to help cut excess capacity. It noted that stricter approvals should be implemented to control refinery expansions.
Previously, the National Development and Reform Commission (NDRC) said that China would close down refineries smaller than 2 million tons/year (40,000 bpd) and ban new plants with less than 10 million tons/year (200,000 bpd) of crude distillation unit capacity in 2021-2025. The state planner noted that an exemption could be granted to refiners committed to dismantling a greater amount of existing capacity.
Data from Sinopec’s research unit EDRI showed that China had a total of 17.8 million bpd of operational CDU capacity at the end of 2020. Another analyst said about 1.88 million bpd of additional capacity is due to come online in 2021-2025. This would bring the overall capacity to 19.7 million bpd by the end of 2025 if all projects came on stream as planned.
Among these projects are PetroChina’s 400,000 b/d Jieyang refinery and the privately-held 320,000 bpd Lianyungang plant, which are scheduled to start up between this and next year. State-owned Sinopec and CNOOC also plan to expand their respective Zhenhai and Daxie plants by 2024. The provincial government of Shandong also plans to start up the 400,000 bpd Yulong refining complex around 2024-2025.
