{"id":168010,"date":"2023-10-30T18:25:04","date_gmt":"2023-10-30T15:25:04","guid":{"rendered":"http:\/\/kupitiblog.store\/576r\/explainer-china-imposes-growth-limits-on-vast-oil-refining-industry\/"},"modified":"2023-10-30T18:25:04","modified_gmt":"2023-10-30T15:25:04","slug":"explainer-china-imposes-growth-limits-on-vast-oil-refining-industry","status":"publish","type":"post","link":"https:\/\/kupitiblog.store\/576r\/explainer-china-imposes-growth-limits-on-vast-oil-refining-industry\/","title":{"rendered":"Explainer-China imposes growth limits on vast oil refining industry"},"content":{"rendered":"<p><img decoding=\"async\" src=\"http:\/\/kupitiblog.store\/576r\/wp-content\/uploads\/2023\/10\/fe00f650c5272bf3d55cc989b2ea8d3f.jpg\"  \/><br \/>\n<span class=\"text\"> FILE PHOTO: A man is seen at an exit of the refinery plants of Chambroad Petrochemicals in Binzhou, Shandong province, China October 24, 2019. REUTERS\/Stringer\/File Photo<\/span><br \/>\n<i class=\"imgGrad\"><\/i><\/p>\n<p>&nbsp;<\/p>\n<p>By Chen Aizhu<\/p>\n<p>SINGAPORE (Reuters) &#8212; China has set a minimum size for new oil refineries and will ban small crude processors that claim to be chemicals or bitumen producers under a plan to limit total capacity at 1 billion metric tons, or 20 million barrels per day, by 2025.<\/p>\n<p>Following are key details on China&#8217;s steps, outlined this week, to rein in a refining industry that recently surpassed the United States to become the world&#8217;s largest.<\/p>\n<p>WHAT IS CHINA TRYING TO ACHIEVE?<\/p>\n<p>The overall capacity cap, first unveiled in October 2021 as part of a plan to reach peak carbon emissions by 2030, is aimed at curbing excessive domestic refinery production and supply overhang to reduce greenhouse gas emissions.<\/p>\n<p>China has long sought &#8212; and sometimes struggled &#8212; to remove excess capacity in highly polluting heavy industrial sectors such as steel and cement. <\/p>\n<p>The think tank Sinocarbon says the refining and petrochemical sectors accounted for 8% of emissions in 2020.<\/p>\n<p>The cap will also help curb China&#8217;s already high reliance on imported <span class=\"aqPopupWrapper js-hover-me-wrapper\">crude oil<\/span>, which stood at 76% last year. <\/p>\n<p>HOW HAS CHINA&#8217;S REFINERY SECTOR GROWN?<\/p>\n<p>Refining capacity in China increased last year to 920 million metric tons per year, or 18.4 million bpd.<\/p>\n<p>The industry&#8217;s recent growth has been driven since 2019 by the creation of three large independent refiners &#8212; Zhejiang Petrochemical, Hengli Petrochemical and Shenghong Petrochemical &#8212; adding a combined 1.52 million bpd capacity that is highly integrated with petrochemicals making.<\/p>\n<p>Together with dominant state refiner Sinopec (OTC:<span class=\"aqPopupWrapper js-hover-me-wrapper\">SHIIY<\/span>) and its rival PetroChina, as well as an army of about 60 smaller independent processors known as &#171;teapots&#187;, the refining sector has ballooned into the world&#8217;s largest, surpassing the United States last year.<\/p>\n<p>That growth has resulted in a low refinery utilization rate of 73% in 2022, based on official output data, compared with more than 91% in the U.S., which means China has surplus capacity to allow for large volumes of refined fuel exports.<\/p>\n<p>WHAT IS THE LIKELY IMPACT OF THE MEASURES?<\/p>\n<p>The measures could force more closures of small, inefficient plants, which have already taken place in teapot hub Shandong province, where some 400,000-bpd worth of capacity was mothballed in 2020 and 2021 to make way for the new Yulong Petrochemical plant of a similar size. <\/p>\n<p>Others players are expected to look abroad for growth. Polyester fiber maker Tongku Group and Rongsheng Petrochemical are both exploring building new refineries in Southeast Asia.<\/p>\n<p>Many teapots, meanwhile, have over the years quietly expanded processing capacity, invested in oil storage or moved up the product value chain to make energy transition chemicals. <\/p>\n<p>WILL CHINA ACHIEVE ITS GOALS? <\/p>\n<p>Apart from increasing scrutiny in approving new plants, the government can wield the powerful tool of crude oil import quotas, to which all independent refiners are subjected.<\/p>\n<p>In recent years, the cap has stood at an annual 243 million tons, or 4.86 million bpd and actual grants have run below that.<\/p>\n<p>Thanks to rigid quota management and crackdowns on illegal quota trading, China has already managed to limit refinery operations to some extent.<\/p>\n<p>Meanwhile, the government also maintains tight control over refined fuel exports, allowing only state refiners and one independent major refiner, Zhejiang Petrochemical Corp, the right to export.<\/p>\n<p>WHICH ARE CHINA&#8217;S BIGGEST REFINERS?<\/p>\n<p>China has about 34 refineries of 200,000 bpd or more, with combined processing capacity of 480 million tons, or 9.6 million bpd, according to Sinopec.<\/p>\n<p>Most of these plants are run by Sinopec, PetroChina and China National Offshore Oil Company. Together, the three state giants operate nearly 12 million bpd of processing capacity.<\/p>\n<p>HOW MUCH NEW CAPACITY IS IN THE PIPELINE?<\/p>\n<\/p>\n<p>Four new refineries with combined capacity of 1.2 million bpd are planned, including the 400,000 bpd Yulong Petrochemical complex in Shandong, the 300,000-bpd Huajin Aramco (TADAWUL:<span class=\"aqPopupWrapper js-hover-me-wrapper\">2222<\/span>) Petrochemical Company in Liaoning province in the northeast, and the 320,000-bpd Sinopec Gulei refinery, as well as the 300,000-bpd expansion at Sinopec Zhenhai. <\/p>\n<p>(ton=7.3 barrels for crude oil conversion) <\/p>\n<p\/>\n<p><p><a target=\"_blank\" rel=\"nofollow noopener\" href=\"http:\/\/www.investing.com\/news\/commodities-news\/explainerchina-imposes-growth-limits-on-vast-oil-refining-industry-3211427\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FILE PHOTO: A man is seen at an exit of the refinery plants of Chambroad Petrochemicals in Binzhou, Shandong province, China October 24, 2019. REUTERS\/Stringer\/File Photo &nbsp; By Chen Aizhu SINGAPORE (Reuters) &#8212; China has set a minimum size for new oil refineries and will ban small crude processors that claim to be chemicals or &hellip;<\/p>\n","protected":false},"author":1,"featured_media":168012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3350],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v16.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Explainer-China imposes growth limits on vast oil refining industry - BiznesSMI - \u043a\u043e\u0442\u0438\u0440\u043e\u0432\u043a\u0438 \u0432\u0430\u043b\u044e\u0442, \u0430\u043a\u0446\u0438\u0438, \u0444\u043e\u0440\u0435\u043a\u0441, \u0438\u043d\u0434\u0435\u043a\u0441\u044b, \u0430 \u0442\u0430\u043a\u0436\u0435 \u0442\u0435\u0445\u043d\u0438\u0447\u0435\u0441\u043a\u0438\u0439 \u0430\u043d\u0430\u043b\u0438\u0437, \u0433\u0440\u0430\u0444\u0438\u043a\u0438, \u0444\u0438\u043d\u0430\u043d\u0441\u043e\u0432\u044b\u0435 \u043d\u043e\u0432\u043e\u0441\u0442\u0438 \u0438 \u0430\u043d\u0430\u043b\u0438\u0442\u0438\u043a\u0430.<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"ru_RU\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Explainer-China imposes growth limits on vast oil refining industry - BiznesSMI - \u043a\u043e\u0442\u0438\u0440\u043e\u0432\u043a\u0438 \u0432\u0430\u043b\u044e\u0442, \u0430\u043a\u0446\u0438\u0438, \u0444\u043e\u0440\u0435\u043a\u0441, \u0438\u043d\u0434\u0435\u043a\u0441\u044b, \u0430 \u0442\u0430\u043a\u0436\u0435 \u0442\u0435\u0445\u043d\u0438\u0447\u0435\u0441\u043a\u0438\u0439 \u0430\u043d\u0430\u043b\u0438\u0437, \u0433\u0440\u0430\u0444\u0438\u043a\u0438, \u0444\u0438\u043d\u0430\u043d\u0441\u043e\u0432\u044b\u0435 \u043d\u043e\u0432\u043e\u0441\u0442\u0438 \u0438 \u0430\u043d\u0430\u043b\u0438\u0442\u0438\u043a\u0430.\" \/>\n<meta property=\"og:description\" content=\"FILE PHOTO: A man is seen at an exit of the refinery plants of Chambroad Petrochemicals in Binzhou, Shandong province, China October 24, 2019. 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