Fixed Asset Investment in China's Refining Industry Totaled Yuan 130 Billion

Fixed asset investment in China's refining industry totaled Yuan 130 billion ($20.9 billion) from January to October, the National Development and Reform Commission said on its website Thursday.

This was an 18.2% increase from the same period last year, but growth was 2.5 percentage points lower than total fixed asset investment expansion across all sectors in China, the commission said.

Projects undergoing construction in the refinery sector rose 12.2% year on year over January to October, the NDRC added.

Analysts expect China to add over 1 million b/d of new refining capacity over the 2012-13 period, Platts previously reported.

The bulk of additions will be in the form of upgrades and expansions.

At least two new greenfield facilities are also expected to start next year -- Sinochem's 240,000 b/d greenfield refinery in southeastern Fujian province and PetroChina's 200,000 b/d Pengzhou refinery in central Sichuan province.

In addition, many teapot refineries in northeastern Shandong province are undergoing expansion by adding secondary processing units in order to remain operational. The government said last year it intended to shut down small, inefficient refineries with capacity of less than 2 million mt/year by 2013.

The overwhelming majority of China's teapot refineries are in Shandong. China's three state-oil companies PetroChina, Sinopec and China National Offshore Oil Corp. had refining capacity of 413 million mt/year as of end 2011.

Capacity of China's teapot refineries in Shandong and Guangdong provinces currently total 112 million mt/year, according to Chinese energy information provider JYD Commodities Hub. Guangdong teapot refineries account for about 8 million mt/year in refining capacity.

From January to October, total refinery throughput rose 2.1% to 9.14 million b/d, according to the National Bureau of Statistics.