The competition in Southwest China’s oil product market heightened after Sinopec delivered the first batch of 260,000 barrels of gasoline and diesel from its Zhanjiang refinery in Guangdong province to southwest China through the Zhanjiang-Beihai pipeline. The Zhanjiang refinery is able to provide 160,000 bpd of gasoline, diesel and jet fuel at capacity. The output is expected to target the domestic southern and southwestern China markets as well as overseas markets.
The 171,000 bpd clean products pipeline was completed last year. It spans 238 kilometres connecting Sinopec’s Zhanjiang refinery to Beihai in Guangxi province. The pipeline startup is expected to bring more competition to fellow Chinese state refiner PetroChina which has been expanding its retail network in southwestern China provinces, including Guangxi, Yunnan, Guizhou, Sichuan, and Chongqing.
PetroChina’s 260,000-bpd Anning refinery in Yunnan has already struggled to operate at nameplate capacity due to more intense competition. When coming online in 2017, the Anning refinery added competition in southwest China which relied entirely on Sinopec’s refineries in the eastern part of the country. The Anning refinery can produce more than 90,000 bpd of gasoline at the full rate. However, it struggled to market the output in Yunnan. The refinery has since 2018 exported gasoline, diesel, LPG, and bitumen to Myanmar and Laos.
