PetroChina to start new refinery in Oct, boost China crude imports
June 24 - PetroChina, China's second-largest state-run refiner, aims to start operating a new refinery in the country's southwest in October after several delays, boosting the nation's already-surging crude imports.
The 260 Mbpd Anning plant in Yunnan province would be the first major Chinese refinery to come online in nearly two years, amid a scale back by state energy firms in adding refining capacity as lower oil prices slashed earnings.
Saudi state oil firm Aramco is looking to invest $1-1.5 billion in the refinery as well as the retail assets of PetroChina, sources told Reuters last year. Aramco was not immediately available for comment on Friday.
"The latest schedule for the Yunnan refinery start-up is October," said a PetroChina spokesperson, without elaborating. The refinery has been delayed several times as tightening environmental regulations forced PetroChina to resubmit approvals for changes to plant configurations.
Crude imports into China, the world's second-largest buyer, soared by 16%, or over 1Mbpd, in the first five months of 2016 from the same period last year, the fastest growth in more than a decade.
That demand, which has helped push oil prices back near $50 a barrel, has been driven by Chinese oil firms building stockpiles and fresh appetite from a new group of importers, the independent plants allowed to import crude for first time since late last year.
A PetroChina official with knowledge of the company's oil trade said that if a deal was finalized with Aramaco, the Saudis would supply at least part of the refinery's crude oil requirements. He declined to be identified as he was not authorized to speak with media.
Saudi Arabia has, for three straight months, lost to Russia the spot as the top crude supplier to China.
The plant is designed to process high sulfur crude oil that will be shipped in tankers and then pumped through a pipeline connecting the southwest coast of neighboring Myanmar and Yunnan, said the industry sources. The last target for the start of operations was the middle of this year.
PetroChina parent CNPC early this year started trial operations of the 1491 mile, 440 Mbpd pipeline that runs parallel to an operating natural gas pipeline, but has to wait for the full completion of the refinery for commercial start-up.
The refinery start-up had also been delayed as the new Myanmar government has been reviewing the deal on the pipeline, said the second PetroChina official.
Local Chinese media have reported the company modified some of the 15 refining units, including adding a 1.2 million tons per year delayed coking unit, which allows for the processing of heavier crude oil.
Reporting by Chen Aizhu with additional reporting by Florence Tan in Singapore; Editing by Joseph Radford
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