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China: PetroChina expects to finish GB III vehicle-use gasoil upgradation before Jul

https://www.chemnet.com   Mar 09,2011
PetroChina is expected to wrap up upgradation of vehicle-use gasoil from GB II standard to GB III standard before July, when China would implement GB III emission standard for vehicles in the whole nation, C1's research found.

The oil giant has started to prepare for the upgradation since late February.
PetroChina's refineries mainly cluster in Northeast China, which would have no problems in producing GB III gasoil.

All refineries and sales branches subsidiary to PetroChina would replace GB II gasoil with GB III grades before July.

Sinopec started to make the preparation since January and planned to improve gasoil quality from May 1, C1 reported earlier.

The two oil refiners' moves indicated nationwide popularization of GB III gasoil was on the track, market sources denoted.

The problem lay in more storage costs, because GB II and GB III gasoils should be stored separately, according to sources with PetroChina's sales branches in North and South China.

Currently, in South China's Guangdong Province, where both GB II and GB III gasoil was available, PetroChina and Sinopec eliminated some GB II gasoil tank farms. It is possible that PetroChina took similar measures in the other provinces in the future, said a source with PetroChina in South China.

Middlemen and blenders may show low interest in GB III gasoil if price spread between the grade and GB II gasoil was narrow, according to traders in coastal areas.

As C1 reported earlier, Sinopec suggested setting unified prices for GB II and GB III gasoils or making price spread within Yuan 0.05/liter (equivalent to about Yuan 60/mt).

The Chinese government plans to spread use of GB III vehicle-use gasoil from Jul 1 while setting the deadline for upgrading quality of the other kind of gasoil at Jun 30, 2013.

GB III gasoil standard requires sulfur content below 350ppm, versus 500ppm for GB II standard.
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