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<Note see earlier April 2007 Coking.com news post on CNOOC>
CNOOC’s 1st refinery on track, beefs up downstream
Reuters, Monday Jan. 7, 2008 – CNOOC Ltd, which owns 51 percent of Penglai, said last month that it had started a new production platform under the second-phase development of the 190,000-bpd field.
(Additional reporting by Emma Graham-Harrison; Editing by Dominic Whiting and Ramthan Hussain) – BEIJING, Jan 7, 2008 – CNOOC’s first oil refinery is on track to start operating in October and the Chinese state oil firm plans to add more processing facilities to establish itself as the country’s third-largest refiner, company officials said.
The parent of listed CNOOC Ltd has also signed a preliminary deal to invest in eastern Shandong province and has set its eyes on acquiring some of China’s remaining independent plants, which are clustered there.
CNOOC, China’s main offshore oil firm, is sticking to its schedule for the 240,000 barrels per day Huizhou refinery in the south, even as severe weather and slow equipment delivery are set to delay the opening of a refinery in northwest China being built by rival PetroChina.
“We are still firmly targeting Sept. 30 as the date of full completion and October for the start of trial run,” said a senior plant manager from the southern province of Guangdong.
After China suffered a serious fuel crunch late last year, Chinese oil firms are being closely watched for signs they can deliver planned refining facilities to a country expected to log a near 6 percent growth in fuel demand this year.
With PetroChina’s delay of its 100,000-bpd Dushanzi refinery in the remote northwest by nearly a year, CNOOC’s 21.8 billion yuan Huizhou plant is set to be one of a few major new suppliers this year.
CNOOC’s Huizhou plant, which is set to supply the thriving Guangdong market, and the company’s plans to acquire independent oil plants, put it firmly on the road to becoming a fully integrated oil firm to take on the country’s oil duopoly of Sinopec Corp and PetroChina .
CNOOC is also quietly quadrupling capacity at a plant to produce bitumen in the booming eastern city of Ningbo to 160,000 bpd, and could eventually turn the facility into a refinery for transportation fuels, officials familiar with the project said.
SMALLER TARGETS
CNOOC may also seek to take over the smaller independent refiners that have managed to stave off government moves to close them down but are now struggling to turn a profit because domestic oil prices are capped while crude values have soared above $100 a barrel.
“We are interested in many of them but can only say that we are at a preliminary stage,” said CNOOC spokesman Liu Junshan, when asked if the company aimed to buy some of the plants under its deal with the Shandong government.
They have a similar deal with neighbouring Hebei province, where they have taken over a small private fuel and petrochemical producer, Zhongjie Hebei Petrochemical Group Ltd Co.
The memorandum of understanding also included construction of storage facilities for refined oil products, Liu added, but declined to give details.
The company’s offshore oil operations would give it an edge for its refining business, both through access to crude and providing income when refinery margins are slim.
Like the Huizhou refinery, the Ningbo facility would process heavy crude from CNOOC Ltd’s fields off north China’s Bohai Bay, the company officials said, without specifying which oilfield.
CNOOC had said that the Huizhou refinery would be supplied by the Penglai 19-3 field in Bohai Bay, China’s largest offshore oil discovery, operated by U.S. oil firm ConocoPhillips .
CNOOC Ltd, which owns 51 percent of Penglai, said last month that it had started a new production platform under the second-phase development of the 190,000-bpd field. (Additional reporting by Emma Graham-Harrison; Editing by Dominic Whiting and Ramthan Hussain) (aizhu.chen@reuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net; +8610 6627 1211) -
Here is news update on the CNOOC Hizhou 240 MBD refinery & 4 drum coker that has been delayed a year to Oct 2008 startup due to equipment delivery problems. Work on second crude Production platform (final total to be 190-240 MBD) was started and it sounds like CNOOC is going shopping for some independent refineries trying to stave off government closure.
A lot of the China petrochemical plants contain refineries and the coker additions are often overlooked when the refining summaries are made.
The article also mentions the Sinopec/PetroChina Dushanzi Refinery has also been delayed a year (until 4Q 2008) – there are 3 new large China refineries coming online this year representing a total ~600 MBD capacity & heavy crude processing (2 are Sinopec’s & 1 is CNOOC’s).
<As side note it would appear with all the new resid gobbling refineries in China (and thier former crude & asphalt suppliers ie Kuwait, Saudi) that China is going to be looking for a LOT of Fuel oil and asphalt……especially given the expansion of China’s land based logistical infrastructure plus the bunker demand due all the coal, iron ore & other imports. >
Regards -
AnonymousChina news carried article on CNOOC Huizhou also has project under construction for a calciner & wasteheat boiler to produce 400,000 mtpy that completes in 2008 along with coker & refinery projects.
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