China’s state-owned refining giant Sinopec in its latest roadmap, said it would expand its refining capacity to increase production of more competitive value-added chemicals and materials while adopting processes that can help the company reduce its carbon footprint. The move is part of Sinopec’s target to become a carbon-neutral company by 2050.
Sinopec aims to process 126 million tons or 5.03 million bpd of crude in the second half of 2021. In the first half, it processed 126.11 million tons of oil, representing 35.7% of China’s total crude processing and an increase of 13.7% from a year earlier. Sinopec plans to expand the capacity of its Zhenhai Petrochemical from 27 million tons/year to 60 million tons/year by 2030. The company will also add a 7 million tons/year of ethylene capacity at Zhenhai.
Sinopec’s downstream expansion will facilitate its efforts to diversify into chemicals as a response to declining demand for key oil products. Gasoline, diesel, and jet fuel accounted for 57% of Sinopec’s overall throughput in January-June, a decrease from 61% a year ago. It revised down its domestic oil product sales projection for 2021 from 183 million tons to 170 million tons.
Nevertheless, the company will also continue its upstream push by allocating 39.2% of its second-half budget, or CNY42.84 billion ($6.62 billion), in exploration and production. Sinopec plans to increase natural gas production by 13.1% year-on-year to 633.5 Bcf in July-December. It also raised its 2021 gas production target from 1,203.4 Bcf to 1,217 Bcf. However, its oil production target was revised down from 280.82 million barrels to 279 million barrels.
