09 Jun 2022 | 10:26 UTC

REFINERY NEWS ROUNDUP: China's crude throughput set to fall further in May

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China's crude throughput is set to fall further in May, extending the downtrend seen in April when it fell to the lowest in two years, as prolonged pandemic-related movement restrictions prompt state refiners to slash output.

In May, utilization rates at China's four state-owned refiners fell from a two-year low to 73.4%, the lowest since 70.4% in March 2020. Most of the state-run refineries across the country have been maintaining low runs or have cut further due to high products inventory, especially gasoline, except few refineries like PetroChina's Sichuan Petrochemical.

PetroChina's run rate in May fell to a 19-month low of 71.3% from 74% in April due to scheduled maintenance in addition to little demand. Sinopec cut its run rates further by about two percentage points from April to 73.7% -- a 26-month low, although its Tahe Petrochemical, Yangtze Petrochemical and Hainan Petrochemical refineries gradually restarted from scheduled maintenance. Its flagship 27 million mt/year Zhenhai Petrochemical had to trim its utilization rate by 15 percentage points to 76% to offset high inventory pressure of oil products, a company source said.

Utilization rates at Shandong independent refineries, however, rose to 56% in May from 53.5% in April as their refining margins recover with cheap crude feedstocks. Run rate at the 20 million mt/year Hengli Petrochemical (Dalian) picked up to around 85% in May from 70% in April, but that in the 40 million mt/year Zhejiang Petroleum & Chemical fell slightly to 79% from 80% last month.

Meanwhile, China's independent refineries in Shandong are set to resume taking Russian Urals, with the first cargo arriving in early June and at least eight more cargoes later in the month. The refineries halted the flow of Urals in November due to more competitively priced alternative supplies, and subsequently held off on buying until late April, despite the price of Urals falling to deep discounts against benchmarks following Russia's invasion of Ukraine in late February.

In other news, China's Gaoqiao Petrochemical in Shanghai is likely to resume gasoline exports in June in order to ease stock pressure, according to a company source. The refinery will export a 30,000 mt cargo of jet fuel in June, the same as in May, but will also add a 30,000 mt cargo of gasoline, according to the source.

Separately, Japan's exports of gasoil and gasoline were expected to decline with the arrival of peak refinery turnaround season, but oil product imports are not likely to increase due to low profitability.

Japan's refinery outages have increased to 733,100 b/d, or 21% of the country's total installed refining capacity of 3.46 million b/d.

Japan's Itochu said May 27 it will start supplying Neste-produced sustainable aviation fuel, or SAF to the Abu Dhabi-based airline Etihad Airways at Narita airport from June, marking the first SAF supply to an overseas airline in the country.

The move comes as the Japanese government announced in December 2021 to replace Japanese airlines' jet fuel consumption with SAF by 2030.

NEW AND ONGOING MAINTENANCE

Refinery
Capacity b/d
Country
Owner
Unit
Duration
Negishi
270,000
Japan
ENEOS
Part
Closure'22
Wakayama
127,500
Japan
ENEOS
Full
Closure'23
Kikuma
138,000
Japan
Taiyo Oil
Full
May
Kawasaki
247,000
Japan
ENEOS
Part
May
Kashima
203,100
Japan
ENEOS
Full
May
Hokkaido
150,000
Japan
Idemitsu
Part
May
Chiba
177,000
Japan
Cosmo
Part
Back
Hainan
184,000
China
Sinopec
Full
Mar
Jinzhou
150,000
China
Petrochina
Full
Apr
Tahe
100,000
China
Sinopec
Full
Back
Huaxing
140,000
China
ChemChina
Full
Apr
Yangtze
290,000
China
Sinopec
Full
Back
Karamay
120,000
China
Petrochina
Full
Jun
Qingyang
74,000
China
Petrochina
Full
Jun
Yumen
50,000
China
Petrochina
Full
Jun
Hohhot
100,000
China
Petrochina
Full
Jul
Qilu
250,000
China
Sinopec
Part
Apr
Wepec
200,000
China
Joint
Part
Apr
Liaohe
100,000
China
Petrochina
Full
May
Shanghai
320,000
China
Sinopec
Part
May
Dalian
200,000
China
Petrochina
Part
May

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
Chiba
190,000
Japan
Idemitsu
Upgrade
2020
Changling
230,000
China
Sinopec
Upgrade
NA
Qinzhou
240,000
China
Guanxi
Upgrade
2023
Fujian
280,000
China
Sinopec
Upgrade
NA
Hainan
184,000
China
Sinopec
Upgrade
2022

LAUNCHES

Tangshang
300,000
China
Xuyang Group
Launch
NA
Jieyang
400,000
China
Guandong
Launch
2022
Huajin Aramco
300,000
China
Joint
Launch
2024
Lianyungang
320,000
China
Shenghong
Launch
Launched
Yulong
400,000
China
Yulong
Launch
NA

Near-term maintenance

New and revised entries

Japan

** Japan's Cosmo Oil restarted the 102,000 b/d No. 2 crude distillation unit at its Chiba refinery in Tokyo Bay May 27 after completing a scheduled maintenance.

** Japan's ENEOS has postponed the restart of the sole 145,000 b/d crude distillation unit at its Sendai refinery in northeast Japan, a company spokesperson said June 6. The company shut the CDU May 9 after finding that sulfur had leaked from the piping of the tank in the sulfur recovery unit at the refinery May 8. ENEOS had planned to restart the CDU early June. The spokesperson said the restart date had not been determined and declined to give details.

** Japan's ENEOS shut its 170,000 b/d No. 2 crude distillation unit at its Kawasaki refinery in Tokyo Bay from May 28 until end-July for scheduled maintenance. The company also shut its 77,000 b/d No. 3 CDU at the Kawasaki refinery from May 11 until mid-July for turnaround.

** Japan's Idemitsu Kosan shut some secondary units for planned maintenance at its Hokkaido refinery in northern Japan from end May until early August but did not say if it suspended the sole 150,000 b/d CDU at the refinery.

China

** Sinopec's Tahe Petrochemical restarted from May 7, following a 45-day maintenance that started March 16.

** Sinopec's Yangtze Petrochemical was due to restart May 29 from a scheduled maintenance since March 15.

** PetroChina's Karamay Petrochemical shut for maintenance May 20 until July 5.

** PetroChina's Qingyang Petrochemical will shut for maintenance June 10-Aug. 5

** PetroChina's Yumen Petrochemical will shut for maintenance July 1-Aug. 16.

** PetroChina's Hohhot Petrochemical is to shut for maintenance July 15-Sept. 15

** PetroChina's Liaohe Petrochemical shut for maintenance May 10 until mid July.

** Sinopec's Shanghai Petrochemical shut a 8 million mt/year CDU as well as a few secondary units for maintenance in mid-May to mid-June.

** PetroChina's Dalian Wepec shut some secondary units for maintenance since May 25, including a residue desulfurization unit for about two months. Wepec cut its crude throughput twice in April after an explosion at its 2.2 million mt/year residue desulfurization unit around the middle of the month.

** Sinopec Hainan in southern China has gradually resumed operations after a scheduled maintenance which started on March 15, a source with the refinery said May 26. "We have restarted the refining units since May 24," the source said, adding that the restart was delayed by about two weeks from the original schedule of May 11.

** ChemChina' Huaxing Petrochemical has completed its maintenance in May. Works at the plant started on March 15.

Existing entries

China

** Sinopec's Qilu Petrochemical in eastern Shandong province has kept its crude run rate unchanged despite shutting two secondary units after an explosion on April 24, as the throughput had been at a minimal level, a company source said. "The crude throughput has already been low and difficult to cut further," a company source said.

Japan

** Japan's Taiyo Oil shut its 106,000 b/d No.1 crude distillation unit and its 32,000 b/d RFCC at its sole Kikuma refinery at Shikoku in western Japan May 20. This is a large-scale planned maintenance which is done every four years, and the company also plans to shut the 32,000 b/d No.2 CDU at the Kikuma refinery May 21. Taiyo Oil will restart the No.1 and No.2 CDUs early-August, and RFCC on around Aug.10.

** Japan's ENEOS shut the sole 35,100 b/d condensate splitter at its Kashima refinery on the east coast May 9 until the end of July for scheduled maintenance. ENEOS has the sole 168,000 b/d crude distillation unit at its Kashima refinery shut for a turnaround from May 10 until mid-July.

** TotalEnergies and ENEOS will jointly conduct a feasibility study to assess production of sustainable aviation fuel at ENEOS Negishi refinery in Yokohama city, Japan, the two companies said April 14. The proposed unit, with 300,000 mt/yr of SAF capacity, would process waste or residue sources from used cooking oil and animal fat. The two companies are considering establishing a new joint venture to produce SAF. Negishi, which is due to decommission a CDU and affiliated secondary units later this year, is located in the "largest aviation fuel demand area in Japan," the statement said.

ENEOS 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.

** Japan's largest refiner ENEOS will decommission the sole 127,500 b/d crude distillation unit at its Wakayama refinery in western Japan in October 2023.

Upgrades

Existing entries

** China's Sinopec Hainan Petrochemical's refinery in southern China plans to bring on stream two new refining units, a 2.6 million-mt/year reformer and a 2.6-million mt/year hydrocracking unit, on July 30, a source with the refinery said April 17. The two new units are part of the Hainan complex's ethylene and refining expansion project, which also includes the addition of a 1 million-mt/year steam cracker, a 400,000-mt/year pyrolysis gasoline hydrogenation unit, a 250,000-mt/year aromatics extraction unit, a 110,000-mt/year butadiene extraction unit, an 800,000-mt/year ethylene glycol unit, a 200,000-mt/year low-density polyethylene unit, a 300,000-mt/year high-density polyethylene unit and a 400,000-mt/year polypropylene unit. The construction of these units started December 28, 2018, S&P Global Commodity Insights reported earlier. The Hainan refinery's ethylene and refining expansion project no longer includes an earlier planned 5 million-mt/year crude distillation unit, according to the refinery source.

** Sinopec plans to add a petrochemical plant to its Fujian refining complex as part of its phase two expansion plans, according to a company source. "An ethylene plant will likely be added," said the source, without giving more details as the plans are still in early stage. The adding of the new chemical plant, will likely help lift the overall run rates at the refinery, sources said. On March. 8, Saudi Aramco and Sinopec said they would study possible capacity expansion at the Fujian refinery. The two companies will undertake a feasibility study looking into "optimization and expansion of capacity", Saudi Aramco said in a statement.

** Chinese Sinopec's refinery Zhenhai Refining and Chemical has a 27 million mt/year refining capacity and a 2.2 million mt/year ethylene plant, after its phase 1 expansion project of 4 million mt/year crude distillation unit and a 1.2 million mt/year ethylene unit was delivered end-June. The company aims to grow its refining capacity to 60 million mt/year and 7 million mt/year of ethylene by 2030.

** PetroChina's Guangxi Petrochemical in southern Guangxi province planned 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.

** Sinopec's Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer.

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

** 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 VDU.

Launches

Existing entries

** China's private refining complex Shenghong Petrochemical has started up recently, its parent company Jiangsu Eastern Shenghong Co. Ltd. said in a letter filed to the Shenzhen Stock Exchange May 16. "The relevant units are ready to take in feedstocks and start up, and the crude distillation unit has been started up successfully," it said. On-spec oil products, including gasoline, gasoil, jet fuel and wax oil, have been produced during the start-up. Located in the coastal city of Lianyungang in Jiangsu province, the complex had some core facilities delivered June 30, 2021, including the CDU, sulfur recovery units, naphtha hydrocracker and its crude tanks. But the startup at the refinery has been postponed several times from end-2021 till early-2022, due mainly to the slow construction progress.

** PetroChina has started constructing a low sulfur bunker fuel oil project with 2.6 million mt/year production capacity at its upcoming Guangdong Petrochemical.

PetroChina targets to commission Guangdong Petrochemical by end-2022. The Guangdong plant is PetroChina's latest greenfield integrated refinery in southern China Jieyang city, featured with a 2.6 million mt/year aromatics unit and a 1.2 million mt/year steam cracker.

** Saudi Aramco said it has "taken the final investment decision" to participate in the development of a major refinery and petrochemical complex in China which is expected to be operational in 2024. The complex will be developed by Huajin Aramco Petrochemical Company (HAPCO), a joint venture between Aramco, North Huajin Chemical Industries Group Corporation and Panjin Xincheng Industrial Group. The decision is subject to finalization of transaction documentation, regulatory approvals and closing conditions. The project represents an opportunity for Aramco to supply up to 210,000 b/d of crude feedstock for the complex. The complex involves a 300,000 b/d refinery, 1.5 million mt/year ethylene-based steam cracker and a 1.3 million mt/year PX unit.

** 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/year 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 was 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.

** 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.