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80% of independent refineries face shutdown risk before 2013

Apr 28, 2011 23:52 PM

C1 Energy (Shanghai) – Apr 28, 2011 ---About 80% of independent refineries in China faced the risk of closure before 2013 under the lately-released Guidance Catalog for Adjustment of Industrial Structure (2011).
According to the guidance catalog, which will take effect from Jun 1, China will shut crude distillate units with annual capacity less than 2-mil mt by the end of 2013.
By the end of 2010, refining capacities of Chinese independent refineries aggregate 110-mil mt per year, about 80% of which is contributed by CDUs under 2-mil mt per year, C1's data showed. Only seven independent refineries with annual capacities totaling 22.5-mil mt are equipped with CDUs of higher capacities.
Small independent refineries may have to expand capacities for survival, market sources pointed out. They could also choose to be merged or acquired by state-owned enterprises for getting capitals and the access to feedstock, said the sources. Or, they could switch to bitumen or chemical production, the sources also denoted.
However, local governments may not strictly execute the elimination policy when focusing on economy growth, some market sources believed.
In addition, "currently, there is no special governmental department in charge of phasing out small and obsolete refining facilities in China," said a refinery source.
State-owned oil giants are expected to see massive launch of new refining projects in 2013.

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