REFINERY NEWS ROUNDUP: China’s Zhejiang to raise capacity by 2025; Japan’s runs down on earthquake

China’s Zhejiang province in the eastern coast aims to have 90 million mt/year refining capacity by 2025 from 51 million mt/year in 2019, suggesting that Zhejiang Petroleum & Chemical’s phase 3 project is unlikely to launch within the 14th Five Year Plan 2021-25, market sources and analysts told S&P Global Platts.

The province’s energy regulator Zhejiang Development and Reform Commission published a draft plan for public comment, which include plans to expand refining capacity, speed up construction of oil pipelines and additional storage capacity for energy security, as well as significantly boost fuel bunkering volume at its pilot free trade zone.

Zhejiang is one of seven refining and petrochemical bases in China’s refining industry, where Sinopec’s flagship 23 million mt/year Zhenhai Petrochemical and the country’s leading private integrated complex ZPC also are located.

To meeting the refining capacity target, the provincial government is said to push forward ZPC’s phase 2 project, and the expansion projects in Sinopec Zhenhai Petrochemical as well as CNOOC’s Daxie Petrochemical, according to a draft copy of the 14th five-year energy plan.

CNOOC has currently completed construction of its 6 million mt/year expansion project in Daxie Petrochemical while Zhenhai Petrochemical’s 15 million mt/year expansion is under construction.

ZPC has started trial runs at one of its two 10 million mt/year crude distillation unit in phase 2, and is expected to commission the whole phase 2, or 20 million mt/year, in 2021.

These projects will contribute 41 million mt/year new capacity on top of 51 million mt/year refining capacity in 2019 to meet the 90 million mt/year target for 2025.

Separately, Japan’s crude throughput dropped 11.9% week on week at 2.36 million b/d in the week of Feb. 14-20, with crude run rates decreasing to 68.2% in the week, data released Feb. 25 by the Petroleum Association of Japan showed. Japan’s refinery runs retreated from 77.4% in the previous week to Feb. 13.

The decreased crude throughput came as a magnitude 7.3 earthquake offshore Fukushima late Feb. 13 shut all units at ENEOS’ 145,000 b/d Sendai refinery in northeast Japan, as well as affecting refining operations at a few other refineries in the Tokyo Bay due to power outages.

However, Japanese refiners do not find any need for oil products imports as refineries in the Kanto region in the east have normalized operations from shutdowns, Petroleum Association of Japan President Tsutomu Sugimori said. Amid the ongoing COVID-19-related state of emergency restriction measures, Japan’s gasoline demand is estimated to drop 13% year on year in February, as well as due to one day less in the month after a leap year last year, Sugimori said.

ENEOS, Japan’s largest refiner, has postponed waterborne fuel oil shipments to Feb. 27 from the earlier scheduled Feb. 20 at its sole 145,000 b/d Sendai refinery in northeast Japan, a spokesman said Feb. 22. The rack fuel oil shipment resumed on Feb. 20, he added. At the Sendai refinery, all the units were automatically shut after the earthquake, but waterborne and rack shipments of oil products, except for the waterborne fuel oil shipment, continued.

A few secondary units at ENEOS’ 270,000 b/d Negishi refinery in Tokyo Bay were also shut due to a power outage triggered by the earthquake, while CDUs have been running.

Idemitsu Kosan has restarted its sole 190,000 b/d CDU at Chiba in Tokyo Bay Feb. 19 that was shut due to a power outage, a spokeswoman said Feb. 19. For secondary units that had also been forced to shut by the power outage, they would resume operations in sequence, she added.

Idemitsu Kosan said Feb. 16 it plans to restart a few secondary units at its sole 70,000 b/d Keihin refinery in Tokyo Bay within days. Some secondary units at the refinery, operated by Idemitsu’s unit Toa Oil, were shut due to power outage triggered by the earthquake, but the CDU has been running, a spokeswoman said.

Fuji Oil planned to restart its sole 143,000 b/d CDU at the Sodegaura refinery on Feb. 16 after all units were shut Feb. 13, a company spokesman said Feb. 15. The operations of its secondary units will restart after the refinery’s CDU comes back on stream, he added.

In other news, Sinopec’s 184,000 b/d Hainan Petrochemical refinery in southern China plans to export about 120,000 mt of refined oil products in February, up from 90,000 mt planned for January, a refinery source said Feb. 23. The Hainan refinery plans to process 740,000 mt of crude oil in February, the source said. This is equivalent to around 105% of its nameplate processing capacity, up from the 95% planned for January, Platts calculations showed.

Near-term maintenance
New and revised entries
Japan

** Japan’s Cosmo Oil plans to shut the 75,000 b/d No. 1 crude distillation unit at its 177,000 b/d Chiba refinery in Tokyo Bay as well as the sole 100,000 b/d CDU at the Sakai refinery in western Japan for scheduled maintenance in autumn, a spokeswoman said Feb. 16. The works are expected to last about a month at both units, the spokeswoman added, but declined to add further details.
China

** Sinopec Shanghai Petrochemical will gradually shut its units for a scheduled full maintenance March 1, a company source said. It will shut the petrochemical units from March 1 while the refining units, including its two crude distillation units, will be shut from April 15, the source said. Sinopec Shanghai plans to complete the maintenance on June 8, the source added. In February, the refinery planned to process 1.2 million mt of crude oil, accounting for 98% of its capacity.

** Sinopec’s Changling Petrochemical in central Hunan province is shut for a 55-day maintenance from around Feb. 19, the refinery said on its official WeChat platform. A total 47 maintenance projects will be carried out when the refinery is shut in February, including whole refining units and some petrochemical units, as well as public utilities. This will also be the first maintenance after the refinery has been operating for a long haul of four years. Prior to this, the refinery usually carries out works every three years. With the maintenance, the refinery planned to process 6.35 million mt of crude oil in 2021.
Existing entries
Japan

** Japan’s largest refiner ENEOS has shut the sole 129,000 b/d crude distillation unit at the Chiba refinery in Tokyo Bay for scheduled maintenance on Feb. 5, a spokeswoman said. The maintenance would last until mid-April.

** ENEOS aims to restart the fire-hit sole 136,000 b/d crude distillation unit at its Oita refinery in the southwest this summer, following the expected completion of a final report from a third-party committee. “We are working to restore [Oita refinery operations] around this summer in our earliest possible restoration schedule,” ENEOS Holdings Senior Vice President Soichiro Tanaka said at an online earnings press conference. A fire broke out at ENEOS’ Oita CDU on May 26 last year during scheduled maintenance that had started on May 12. The crude distillation tower at the sole Oita CDU was bent from around the middle by the fire.

** Japan’s ENEOS plans to shut in late February the two crude distillation units at the Mizushima-B plant in western Japan for scheduled turnarounds. ENEOS’ scheduled shutdown of the 95,200 b/d No. 2 crude distillation unit will last until late April, while the 105,000 b/d No. 3 CDU will shut until early June.

** Japanese refiner Fuji Oil plans to shut its sole Sodegaura refinery in Tokyo Bay for a large-scale regular maintenance from mid-May to end-June, a company spokesman said. The large-scale maintenance is carried out once every four years at the refinery, and is expected to last for more than a month, he added.

** Japan’s largest refiner ENEOS said it will decommission the 120,000 b/d No. 1 CDU at its 270,000 b/d Negishi refinery in Tokyo Bay in October 2022, bringing down its total refining capacity to around 1.75 million b/d. ENEOS’ latest move comes as it has been considering ways to optimize its refining system in Japan in the face of a sharp decline in domestic oil demand, accelerated by the coronavirus pandemic, amid increased competition in Asia. Under the latest development, it will also decommission secondary units attached to the No. 1 CDU, including a vacuum distillation unit and fluid catalytic cracker, the capacities of which were not immediately disclosed. ENEOS will also decommission a 270,000 mt/year lubricant output unit at the Negishi refinery.

** Due to the pandemic, Japanese refiner Taiyo Oil postponed works at Kikuma that would have involved shutting down the CDUs to 2021 or the year after to coincide with large-scale regular repairs.
China

** CNOOC’s Huizhou Petrochemical will shut for maintenance over February-April.

** Sinopec’s Jinling Petrochemical has shut an 8 million mt/year CDU as well as some secondary units for about 40 days of maintenance since Nov. 18, 2020.
Upgrades
New and revised entries

** Sinopec’s Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer this year and to bring its port upgrading project online by end-December, it said.
Existing entries

** Japan’s second-largest refiner, Idemitsu Kosan, plans to start work on raising the residue cracking capacity at its 45,000 b/d FCC as it aims to increase LSFO output. Idemitsu Kosan’s upgrade at the Chiba refinery was part of its response to the International Maritime Organization’s global low sulfur mandate for marine fuels from January.

** China’s Sinopec Luoyang Petrochemical expects the start-up of the 2 million mt/year CDU expansion to be delayed to H1 2021, a refinery source said.

** Axens said its Paramax technology has been selected by state-owned China National Offshore Oil Corp. for the petrochemical expansion at the plant. The project aims at increasing the high-purity aromatics production capacity to 3 million mt/year. The new aromatics complex will produce 1.5 million mt/year of paraxylene in a single train, Axens said. The Huizhou petrochemical complex has been operating an Axens Paramax complex since 2009 with 1.3 million mt/year of aromatics production.

** Construction of a new 1 million mt/year coker at Chinese independent refinery Haiyou Petrochemical, in eastern Shandong, has been put on hold, according to sources close to the refinery. The new coker was expected to come on stream in 2019.

** Sinopec’s 21 million mt/year Jinling Petrochemical refinery in eastern China will build a new 600,000 mt/year vacuum distillation unit. It has reconfigured its No. 3 gasoline hydrotreater to a 360,000 mt/year hydrotreater to produce RMG 380 CST bunker fuel oil with sulfur content no higher than 0.5%.

** Sinopec’s Zhenhai refinery in Ningbo, eastern Zhejiang province, has issued four tenders for preconstruction works of its 1.2 million mt/year ethylene expansion project. The project also include 15 million mt/year of refining capacity.
Launches
New and revised entries

** China’s private refining and petrochemical complex Zhejiang Petroleum & Chemical has started trial run in one of its two 10 million mt/year CDU in the phase 2, and is expected to commission the whole phase 2 (20 million mt/year) in 2021. Zhejiang Petroleum & Chemical’s phase 3 project is unlikely to launch within the 14th Five Year Plan (2021-2025), market sources and analysts told S&P Global Platts.
Existing entries

** Honeywell said China’s Shandong Yulong Petrochemical will use “advanced platforming and aromatics technologies” from Honeywell UOP at its integrated petrochemical complex. The complex will include a UOP naphtha Unionfining unit, CCR Platforming technology to convert naphtha into high-octane gasoline and aromatics, Isomar isomerization technology. When completed Yulong plans to produce 3 million mt/yr of mixed aromatics. Shandong’s independent greenfield refining complex — Yulong Petrochemical — announced to start construction work at Yulong Island in Yantai city at the end of October, S&P Global Platts has reported previously. The construction work is expected to be completed in 24 months. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province.

According to the preliminary schedule, a total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years.The 10 refiners would also transfer all of their crude import quotas of 13 million mt/year to the new project in Yantai city, eastern Shandong province. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical are the first three refineries to be dismantled this year. Yuhuang Petrochemical and Zhonghai Fine Chemical have been in the process of dismantling, while Jinshi Asphalt has already finished. Major units to be constructed include two 10 million mt/year crude distillation units, two 1.5 million mt/year ethylene crackers, as well as other related units.

** Saudi Aramco has pulled out from a joint project to build a greenfield 300,000 b/d refining and petrochemical complex in northeast China, sources with direct knowledge of the matter told S&P Global Platts on Aug. 21. Aramco originally signed a deal with China’s North Industries Group (Norinco) and Panjin Sincen to form Huajin Aramco Petrochemical Co. in February 2019, during a visit by Crown Prince Mohammed bin Salman to Beijing. The JV plans to build a $10 billion integrated refining and petrochemical complex in northeast China’s Liaoning province Panjin city with a 1.5 million mt/year ethylene cracker and a 1.3 million mt/year PX unit.

** KBR said it has been awarded a contract for catalyst supply for a vinyl acetate monomer grassroots project at China’s Shenghong (Lianyungang) refinery. The 300,000 mt/year unit is a “key intermediate” for the production of polymers and resins for adhesives, coatings, paints, films, textiles and other products. In 2019, the refinery started construction of its 16 million mt/year (320,000 b/d) CDU and 3.1 million mt/year No.1 continuous reformer. Shenghong’s refinery will only have one crude distillation unit with a processing capacity of 16 million mt/year, which will become the single largest distillation unit in China. The project is slated for completion in 2021. China’s independent Shenghong Group has opened a trading office in Singapore ahead of the start-up in the second half of 2021 of its refinery in Jiangsu province.

** PetroChina officially started construction works at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on Dec. 5, 2018. Trial operations at the refining complex are expected to start in October 2021.

** China’s coal chemical producer Xuyang Group has announced plans to build a greenfield 15 million mt/year refining and petrochemical complex in Tangshang in central Hebei province.
Source: Platts