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Lower runs at China’s refineries, higher in Japan



China’s crude throughput fell slightly in December due to some maintenance works toward the year-end, the latest industry data and information collected by S&P Global Platts showed.

The average run rate of the four state-owned oil majors, Sinopec, PetroChina, CNOOC and Sinochem, stood at around 78% to date in December, from an 80% average in November, according to the data.

The reduction comes despite a rise in gasoline and gasoil sales since mid-November, as refineries try to clear product inventories ahead of year-end book closures, refiners and analysts said.

PetroChina’s average utilization rate fell to 69% from 73% in November as its Yunnan Petrochemical refinery in southwestern China was shut for maintenance from Dec. 5 despite three other PetroChina plants lifting their run rates. Sinopec has kept its average run rate steady from November at around 82% of its capacity. Its Jinling Petrochemical refinery slashed its run rate by 21 percentage points from November, as the plant’s 8 million mt/year CDU as well as some of its secondary units have shut completely for the month.

Three of Sinopec’s other refineries, including Qingdao Petrochemical, Wuhan Petrochemical and Qilu Petrochemical, have restarted after the completion of maintenance, making up for the crude throughput loss at Jinling.

Qilu Petrochemical, which restarted its units in late November, has yet to ramp up its run rate in December back to its normal level of around 85%, due to emission control measures put in place in the region during winter.

China’s independent refineries have mostly lowered their run rates in December, with the exception of Hengli Petrochemical (Dalian) refinery.

The 20 million mt/year Hengli refinery lifted its run rate to around 107% from 105% in November despite being short of crude import quota.

However, Zhejiang Petroleum & Chemical’s average utilization rate at its three 10 million mt/year CDUs was about 70% in December, with one of the CDUs still undergoing trial runs, according to a company source.

Meanwhile, 45 small private sector refineries in Shandong province lowered their combined average run rate slightly to around 73% as of Dec. 17, from around 76% in November, according to local information provider JLC.

Separately, PetroChina’s Liaoyang Petrochemical refinery in northeastern Liaoning province plans to export 40,000 mt of gasoil in December, a source with knowledge of the matter told Platts Dec. 14. This will be unchanged from November, when exports were cut from 80,000 mt/month over August-October. According to the source, demand for low vapor gasoil has been relatively strong in winter when temperatures are low, thus having less to export.

Sinopec’s Hainan Petrochemical refinery in South China plans to export about 140,000 mt of refined oil products in December, down from 160,000 mt planned for November.

Sinopec plans to export 120,000 mt of gasoil in December from its refinery in northern Tianjin municipality. This will be about 50% higher from the planned export of 80,000 mt in November.

Meanwhile, Japan’s crude run rates rose further to 81% in the week ended Dec. 19, after touching 80% for the first time in 37 weeks the previous week, as the country’s crude throughput rose 1.1% week on week to 2.80 million b/d, the Petroleum Association of Japan said. Dec. 13-19 crude throughput, however, was down 11.5% year on year, according to Platts data. The week-on-week increases in refinery runs and crude throughput came as refiner ENEOS restarted the 95,200 b/d No. 2 crude distillation unit at its 200,200 b/d Mizushima-B plant on Dec. 15.

New and revised entries

China

** Sinopec’s Qilu Petrochemical, which has been restarting its units since November after halting its 8 million mt/year CDU and some secondary units for a partial turnaround in September, has yet to ramp up its run rate in December back to its normal level of around 85%, due to the emission control measures put in place in the region during winter.

** Sinopec’s Qingdao Petrochemical plant restarted around Dec. 14 from scheduled maintenance that began Oct. 10.

** Sinopec’s Wuhan Petrochemical restarted from two months of maintenance lasting from October to around Dec. 15.

** CNOOC’s Huizhou Petrochemical will shut for maintenance over February-April 2021.

Japan

** Japan’s ENEOS restarted the 95,200 b/d No. 2 CDU at its 200,200 b/d Mizushima-B plant Dec. 15, a company spokeswoman said. The CDU had been shut since Nov. 4, but the company has not disclosed the reason for the shutdown. The spokeswoman said the CDU’s shutdown was not part of a scheduled turnaround.

Existing entries

China

** PetroChina’s Yunnan Petrochemical refinery in southwestern Yunnan province, shut the whole refinery for a 50-day maintenance, according to a company source. The refinery will be shut from Dec. 5 to last till end-January. The refinery aims to operate for another four years once the maintenance is completed, it said on its official Wechat account. This will be the first overall maintenance at the refinery since it launched commercial operations from August 2017. The run rates at the refinery will drop to 16% because of the maintenance this December, as only 180,000 mt of crudes will be processed this month.

** Sinopec’s Changling Petrochemical in central Hunan province, will shut for a 55-day maintenance from around Feb. 19 2021, the refinery said on its official Wechat account. A total of 47 maintenance projects will be carried out when the refinery is shut in February, including the whole refining units and some petrochemical units, as well as the public utilities. This will also be the first maintenance after the refinery has been operating for a long haul of four years. Prior to this, the refinery usually had maintenance every three years.

** Sinopec Shanghai Petrochemical has stopped production of International Maritime Organization-complaint marine fuel at its refinery due to a scheduled maintenance of its 3.9 million mt/year residual hydrotreater, a company source said on Nov. 26. “We don’t produce VLSFO in November, neither in December as I know,” the source said. The plant shut its 3.9 million mt/year residual hydrotreater in late October for a 50-day maintenance period, the source said. The unit was partially shut in April for 40 days to replace the catalyst, leading to VLSFO suspension in that month.

** Sinopec’s Jinling Petrochemical shut an 8 million mt/year CDU as well as some secondary units for about 40 days of maintenance since Nov. 18.

Existing entries

Japan

** Due to the coronavirus pandemic, Japanese refiner Taiyo Oil postponed works at Kikuma that would have involved shutting down the CDUs to 2021 or the year after to coincide with large-scale regular repairs.

** ENEOS will take more than one year to resume operations at the sole 136,000 b/d crude distillation unit at its Oita refinery in the southwest of Japan after it was hit by a fire May 26, 2020, a company official said June 18. The fire broke out during maintenance works, which started May 12.

Upgrades

Existing entries

** Japan’s second-largest refiner, Idemitsu Kosan, plans to start work on raising the residue cracking capacity at its 45,000 b/d FCC as it aims to increase LSFO output. Idemitsu Kosan’s upgrade at the Chiba refinery was part of its response to the International Maritime Organization’s global low sulfur mandate for marine fuels from January.

** China’s Sinopec Luoyang Petrochemical expects the startup of the 2 million mt/year CDU expansion to be delayed to H1 2021, a refinery source said.

** 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, Axens said. The Huizhou petrochemical complex has been operating an Axens Paramax complex since 2009 with 1.3 million mt/year of aromatics production.

** Construction of a new 1 million mt/year coker at Chinese independent refinery Haiyou Petrochemical, in eastern Shandong, has been put on hold, according to sources close to the refinery. The new coker was expected to come on stream in 2019.

** Sinopec’s 21 million mt/year Jinling Petrochemical refinery in eastern China will build a new 600,000 mt/year vacuum distillation unit. It has reconfigured its No.3 gasoline hydrotreater to a 360,000 mt/year hydrotreater to produce RMG 380 CST bunker fuel oil with sulfur content no higher than 0.5%.

** Sinopec’s Zhenhai refinery in Ningbo, eastern Zhejiang province, China, has issued four tenders for pre-construction works of its 1.2 million mt/year ethylene expansion project. The project also includes 15 million mt/year of refining capacity.

Launches

Existing entries

** China’s private refining and petrochemical complex Zhejiang Petroleum & Chemical started up one of its two 200,000 b/d crude distillation units at its 400,000 b/d Phase II refinery on Nov. 1. ZPC’s average utilization rate for three of its 10 million mt/year CDUs was 83% in November, according to a company source. This translates to about 2 million mt of crude throughput in the month, up about 9.5% from October. Refinery engineers said a new CDU under trial operations should run above 50% of capacity, which is likely to be the rough utilization rate of ZPC’s new CDU that was undergoing trial runs in November ahead of starting up. This could lead the utilization rate of the existing two CDUs — with a combined capacity of 20 million mt/year — to be at about 100% in November compared to 110% in October.

** China’s Shandong’s independent greenfield refining complex — Yulong Petrochemical — has announced to start construction work at Yulong Island in Yantai city, according to a local report. This will be the latest and biggest greenfield refinery to be built up by the independent sector in Shandong, which is home to the country’s vast small and medium sized independent refineries with a combined capacity of over 130 million mt/year. The construction work at the 20 million mt/year refining complex, with an investment of around Yuan 127.4 billion ($18 billion), is expected to be completed in 24 months.

The project, which has been approved by the Premier Li Keqiang during his visit in Yantai over June 1-2, will help transfer the outdated refining capacity into this new one. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province. According to the preliminary schedule, a total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years. The 10 refiners would also transfer all of their crude import quotas of 13 million mt/year to the new project in Yantai city, eastern Shandong province. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical are the first three refineries to be dismantled this year. Yuhuang Petrochemical and Zhonghai Fine Chemical have been in the process of dismantling, while Jinshi Asphalt has already finished. Major units to be constructed include two 10 million mt/year crude distillation units, two 1.5 million mt/year ethylene crackers, as well as other related units.

** Saudi Aramco has pulled out from a joint project to build a greenfield 300,000 b/d refining and petrochemical complex in northeast China, sources with direct knowledge of the matter told S&P Global Platts on Aug. 21. Aramco originally signed a deal with China’s North Industries Group (Norinco) and Panjin Sincen to form Huajin Aramco Petrochemical Co. in February 2019, during a visit by Crown Prince Mohammed bin Salman to Beijing. The JV plans to build a $10 billion 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.

** KBR said it has been awarded a contract for catalyst supply for a vinyl acetate monomer VAM grassroots project at China’s Shenghong (Lianyungang) refinery. The 300,000 mt/year unit is a “key intermediate” for the production of polymers and resins for adhesives, coatings, paints, films, textiles and other products. In 2019, the refinery started construction of its 16 million mt/year (320,000 b/d) CDU and 3.1 million mt/year No.1 continuous reformer. Shenghong’s refinery will only have one crude distillation unit with a processing capacity of 16 million mt/year, which will become the single largest distillation unit in China. The project is slated for completion in 2021. China’s independent Shenghong Group has opened a trading office in Singapore ahead of the start-up in the second half of 2021 of its refinery in Jiangsu province.

** PetroChina officially started construction work at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on December 5, 2018. Trial operations at the refining complex are expected to start in October 2021.

** 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.

Source: Platts

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