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PetroChina plans to increase its
share of the domestic oil refining market to 45 percent by 2020 as
demand for fuels rise.
The State-controlled oil company will more than double annual
refining capacity to 300 million tons by 2020, about 6 million barrels
a day, Vice-President Shen Diancheng said earlier this week. PetroChina
currently accounts for about 40 percent of China's oil refining.
PetroChina and Sinopec are increasing chemical production to supply
manufacturers in the world's fastest growing economy. Rising wealth is
driving increased sales of cars and pushing up consumption of fuel
and diesel. China will have to double refining capacity by 2020 to meet
demand, Shen said.
"PetroChina and Sinopec are facing more and more competition from
domestic rivals and are trying to protect their market share," said
Qiu Xiaofeng, an oil analyst at China Merchant Securities Co in
Shanghai.
Sinopec plans to expand the capacity of its largest crude-oil
processing plant by 15 percent by September 2009 to increase
production of ethylene and fuels, its parent company said.
Sinopec Zhenhai Refining & Chemical Co's annual capacity will
rise to 23 million metric tons, about 460,000 barrels a day, from 20
million tons, China Petrochemical Corp said in its company newsletter
Sinopecnews.
PetroChina and Sinopec are expanding even as State curbs on fuel
prices and record crude oil costs limit their ability to profit from
selling fuels in the world's most populous nation. China controls fuel
prices to limit their impact on inflation.
China's diesel prices are 2,840 yuan ($406.19) a ton lower than the
global level and those of fuel are 2,745 yuan a ton lower, Shen
said. That's causing "large-scale" losses at China's State-controlled
refineries, he said.
"Everything is in short supply now. The supply of diesel and fuel are very tight at the moment. We still face pressure to ensure
market supplies."
PetroChina's refining capacity will reach 165 million tons by 2010,
about 40 percent of the nation's total, from about 140 million tons
last year, Shen said. PetroChina plans to have six
10-million-ton-a-year refineries by 2010 and 18 such plants by 2020.
Rivals of PetroChina and Sinopec are increasing their market
presence. China National Offshore Oil Corp, which has concentrated on
oil and gas exploration, aims to increase its refining capacity
fivefold to 60 million tons, Zhang Guoxiang, senior engineer at the
company's Huizhou refinery, said recently.
Sinochem Corp, China's biggest chemical trader, is building a 12
million-ton-a-year refinery in the southern province of Fujian. The
plant in Meizhou Bay will process 5 million tons of heavy crude when
its first phase is completed by 2009, President Liu Deshu had said last
year.
PetroChina's capacity to produce ethylene, a raw material used to
make plastics, paints and household detergents, will rise to 4.57
million tons by 2010 and 12 million tons by 2020, compared with 2.71
million tons last year, Shen said.
PetrolWorld 070508
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