Sinopec mobilizes to meet oil products needs

China Petrochemical Corporation Group (Sinopec Group), Asia’s largest oil refiner, said it would cut ethylene output to increase diesel fuel production and double oil product imports in June to meet a surge in local summer wheat harvest demand amid escalating international oil prices. The company planned to cut ethylene output by 65,000 tons, which would raise oil output by 200,000 tons. In a statement on its web site, Sinopec said it would tweak oil product yields of its refineries in order to raise diesel fuel output, while cutting production of kerosene and gasoline. Oil product supply to the wholesale and direct distribution segments will be trimmed. Sinopec is also planning to rev up production at its newly commissioned 10 million metric ton per year (200,000 barrels per day) refinery in the coastal city of Qingdao, in east China’s Shandong province. At full utilization, the Qingdao refinery’s gasoil production would represent about 60% of China’s gasoil imports in the first four months of 2008. Sinopec said it has worked out measures to ensure oil supply for summer harvest operations in the provinces of Shandong, Hebei, Shanxi and Shaanxi, major grain producers of China. Due to rising domestic demand, fuel shortages were reported in some areas in the country. Sinopec’s refined oil supply is expected to rise 18.5% year-on-year and its refined oil output by 8.9% in the first half of this year, according to the company. (June 12/13, 2008)