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China to shut oil refineries under 2 mil mt/year by end 2013: NDRC

https://www.chemnet.com   Apr 28,2011 Platts
China's plans to close refineries with crude distillation units of under 2 million mt/year (40,164 b/d) by end 2013 as part of its plan to phase out polluting industries.

In a 111-page report published late Tuesday, the country's top economic planning agency, the National Development and Reform Commission, detailed a comprehensive list of industries that the government is encouraging, restricting and phasing out in the coming years.

The list includes industries in the petroleum, petrochemical, electricity, mining and forestry sectors and has widespread implications on new investments as it will serve as a guideline for authorities to draft policies on new investments.

According to the report, Beijing will restrict building of new refineries with crude throughput of less than 10 million mt/year (200,822 b/d), catalytic crackers and hydrocrackers of under 1.5 million mt/year in capacity, reformers of less than 1 million mt/year in capacity, and steam crackers of under 800,000 mt/year capacity.

This is not the first time that the government has tried to shut small, obsolete refining facilities.

In 2009, the NDRC said that it aimed to close down low-efficiency, low-quality refining plants of less than 1 million mt/year (20,082 b/d) by 2011.

The NDRC said then that it will also encourage closure, merger or transformation of refining facilities with capacities of 1-2 million mt/year.

Besides the state-owned oil majors, the Chinese oil refining sector is also characterized by a large number of independent refineries with small crude processing capacity, which are commonly known as teapot refineries.

An earlier estimate by the All-China Federation of Industry and Commerce showed that China's 60-plus private refineries have a total refining capacity of over 80 million mt/year (1.6 million b/d), which would be equivalent to around 19% of the country's total capacity.

The independent refineries get only a small volume of domestic crude allocation from the state oil majors and the difficulty in securing crude feedstock for their refining needs has forced Chinese independent refiners to process fuel oil and bitumen instead in order to stay afloat.
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