The Chinese government is pumping billions of dollars in new mega-refineries amid a volatile global oil market, media reports said. It is reported that the four refineries with a capacity of processing 1.4 million crude barrels a day are under development; surpassing the combined capacities of refineries in the UK.
It is reported that the new refineries are constructed in provinces such as Zhejiang, Jiangsu and Yantai. These refiners will aim to turn crude oil directly into petrochemicals and plastics.
Harry Liu, executive director for oil markets, midstream and downstream at IHS Markit, told the media, “That’s particularly bad news for plants in Taiwan and South Korea designed to cater to China’s petrochemical market.”
China has already added 1 million barrels since the start of 2019. The boost in refinery capacity expects to produce more petroleum products and plastics. The country’s refining capacity has tripled since the beginning of this millennium because its refiners have managed to be in line with global oil growth.
It is reported that China’s oil production is in excess compared to its consumption, leading to exports of nearly 1 million a day, which is close to volumes imported by India and South Korea.
The fuel demand in the country is expected to struggle in the future as refiners are gearing up to become carbon neutral companies in the future. China National Petroleum predicted that its demand for refined products will just surge 0.9 percent a year through 2025 and reach the highest level during the period.