Major refineries in China may record the year's maintenance peak this July, involving in a combined 36-mil-mt/yr (720kbd) crude refining capacity, occupying 7% of the total, C1's research showed.
The refineries to go into turnarounds are mainly located in Northwest China, Shandong and Central China. Dushanzi Petrochemical and Lanzhou Petrochemical will shut crude distillate units with capacities totaling 21-mil mt per year (420kbd) for maintenance; Qingdao Refining & Chemical will overhaul 10-mil-mt/yr (200kbd) CDU; Jiujiang Petrochemical will revamp 5-mil-mt/yr (100kbd) CDU. All of the maintenance occurs once in three years.
The maintenance may lead to about 1-mil mt of reduction in gasoil output, C1 estimated. Increase in gasoil output this year is forecast to be lower than demand and China would popularize GB III vehicle-use gasoil nationwide from Jul 1, which would worsen gasoil supply tension.
The National Development & Reform Commission, China's energy watch dog, has recently warned of oil product supply tightness and required state-owned oil refiners to be well prepared to guarantee the supply.
However, gasoil supply squeeze is expected to ease in the fourth quarter, when maintenance would drop obviously and two 5-mil-mt/yr CDUs will become operational.
Major Chinese refineries are estimated to have a total of 102-mil mt of annual refining capacity under maintenance in the whole year of 2011, down 20% from 2010, C1 reported earlier. The first maintenance peak happened in March, when about 4% of refining capacity was under maintenance.
C1's research did not involve in refineries underlying China National Offshore Oil Corporation (CNOOC), Shaanxi Yanchang Petroleum Group and China North Industries Group Corporation.
