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March 3, 2017

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Sinopec to invest US$29b to modernize 4 refining bases

CHINA Petrochemical Corp will invest 200 billion yuan (US$29 billion) to upgrade four refining bases in the years through 2020 to produce higher-quality fuels, the company said yesterday.

The upgrades of Sinopec Group, as the company is better known, come as China, the world’s second-biggest oil consumer, is embracing more stringent fuel standards in its battle against pollution.

After the upgrades, the total refining capacity of the four refining sites will reach 130 million tons per year, or 2.6 million barrels per day, while ethylene capacity will reach 9 million tons per year, Sinopec said in a statement.

The sites are in the cities of Shanghai, Nanjing and Zhenhai on the east coast and Maoming-Zhanjiang in south China’s Guangdong Province.

After the expansion, the bases will make up 45 percent of Sinopec’s total refining capacity and 65 percent of its ethylene capacity.

“It’s a strategic move that fits the global industrial trend for clustered and scaled growth and helps transform China’s petrochemical products to medium and high quality,” Sinopec Chairman Wang Yupu said.

Between the four bases, Sinopec will be able to optimize the product structure and reduce logistics cost.

Sinopec, Asia’s largest refiner, started construction in December of a greenfield oil refinery and petrochemical complex in Zhanjiang that includes a 200,000-barrel-per-day refinery and an 800,000-ton-per-year ethylene complex.

The refinery will mainly produce gasoline and diesel that meets the National VI specifications, up from the previous Euro V guidelines that cap sulfur content at 10 parts per million, Sinopec said.

The new plant will be geared toward producing gasoline and aviation fuel at the expense of diesel, the company said.

After the upgrades, Sinopec estimates the four sites will generate revenue of 800 billion yuan by 2020, based on crude oil prices of US$54 a barrel.


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