CNPC, Sinopec expanding refining capacity

China Petrochemical Corporation (Sinopec) and China National Petroleum Corporation (CNPC), the country’s top two oil producers, are expanding their refining facilities, to ease the tightness in petroleum product supply in China. Sinopec is scheduled to add and expand at least 20 refineries with 10 million-ton yearly production capacities in the coming two to three years. CNPC plans to set up 10 refineries, each having a yearly production capacity of 10 million tons. So far, there are only five refineries whose yearly output is in the 10-million-ton range. The planned expansion of the two oil giants will cost at least 200 billion yuan (US$26 billion). The larger refineries will consume 300 million tons of crude oil a year once operational. After the completion of the 30 plants, China will have to import more crude oil because the country’s current output of 200 million tons of crude oil is peaking. Currently, China has to import 50% of its total crude oil consumption. (September 4, 2007)