PetroChina delays launch of two refineries

January 29, 2014

PetroChina has put off starting up two new refineries and delayed expansion of another to counter the threat of overcapacity as oil demand growth slows in the world's second largest oil consumer, Reuters reported on January 23.

"China's oil consumption growth is slowing down and overcapacity in the oil industry is looming. Rapid expansion in refining capacity will result in a glut and increasing net fuel exports," said the PetroChina official who declined to be identified because he is not authorized to talk to media.

The delays should also help support Asia's refining margins, which were expected to be weak this year with the planned capacity additions in China and more in the Middle East.

PetroChina will now start up its 200,000-bpd Kunming refinery in the Yunnan province in 2016, two years behind the original schedule, the official said.

Operation of a 400,000-bpd joint venture refinery in Jieyang of Guangdong province will be delayed to 2017, versus the original plan of 2013, he said.

The company will also delay expansion of Huabei refinery in north China to 2015 from this year, the official added.

Copyright: Reuters, 2014