(S&P Global Platts) Sinopec’s Economics & Development Research Institute, or EDRI, foresee China becoming the world’s top refiner with about 1 billion mt/year, or 20 million b/d, of capacity by 2025, its vice general engineer Ke Xiaoming said at the launch of EDRI’s China Energy and Chemicals Industry Development Report in Beijing on Dec. 17.
China’s refining capacity is 880 million mt/year currently in 2020 and would be 905 million mt/year in 2021, Ke said.
About 250 million mt/year new refining capacity will be added across the world in the next five years, with new capacity additions in China accounting for 40%-50% of that, according to Ke.
The new capacity will be concentrated in four provinces along the coast: Liaoning in northeastern China, Shandong and Zhejiang in the east, and Guangdong in southern China, Ke said, adding that Liaoning would see the heaviest addition at 42 million mt/year.
OIL PRODUCTS DEMAND
China’s oil products demand is expected to peak in 2025 at 356 million mt/year, earlier than a previous projection of around 2029, as emissions control policies cut fuel consumption, Ke said.
In 2025, new energy vehicles are expected to account for 20% of new car purchases, rising from 4% in 2020, which would replace 19 million mt of transportation fuel consumption.
Gasoline demand is projected to peak at 156 million mt/year in 2025, earlier than the previously projected peak at 176 million mt by around 2028.
Ke forecast kerosene to peak at 78 million mt/year in 2040 and said gasoil has already peaked at 173 million/mt in 2015.
Light ends for petrochemical feedstocks would not peak until 2040, at 186 million mt/year, as demand for petrochemical products will continue growing at 6% annually over 2020-25, Ke said.
OIL PRODUCTS EXPORTS
China is expected to export about 70 million mt/year of surplus oil products in 2025, Ke said.
China’s oil products exports of gasoline, gasoil and jet fuel hit 55.37 million mt in 2019, data from the country’s General Administration of Customs showed. The volume is expected to fall to below 50 million mt in 2020 on weak demand overseas because of the pandemic.
Ke said China has to secure outlets outside the Asia-Pacific region for its growing oil products surplus while LR-sized ships are required for cutting freight and shipping barrels to farther destinations, such as Africa.
In a shorter term, Ke expected China’s oil products consumption in 2021 to grow 2% from 2019 levels, although jet fuel demand would remain unable to recover to the 2019 level.
Year-on-year oil products consumption growth in the fourth quarter has finally flipped to positive at 1% from a reduction of 20% in the first quarter, he added.
Sinopec is the world’s biggest refiner by capacity at about 6.14 million b/d. EDRI is its research arm.
