The international oil and gas industry is alarmed, after the rumours about Petro China buying into a proposed refinery in Ecuador hit the market in the last week. This development is, nevertheless, only the latest step in a longer strategy to expand the global footprint of China's booming refining business analysts believe...
Talks with the Ecuadoran government and the other partners in Ecuador like Petroleos de Venezuela and Petro Ecuador underline the seriousness of these plans: Recent press reports suggested that PetroChina was eager to become a partner in the US $ 12.5 billion project.
This particular refinery, located at El Aromo, south of Guayaquil, has long been planned: The 300,000 barrels per day plant will not only produce refined products for Ecuador but would also be situated in a prime position to export its products into the Pacific Rim. Analysts of Global Data believe that this capability was the factor that sparked Petro China's interest.
While refineries in Europe struggle and the industry in the US is forced to upgrade to meet increasingly stringent environmental norms, refiners in developing nations are about to take of. A recent report by market analysts GBI expects that a total of around 198.1 MMtpa of additional capacity will be installed in Asia and the Middle East during the next five years. More in Refinery Markets in Asia and the Middle East Boom.
A Decade Of Expansion for China's Oil Industry
Thorughout the last decade have Chinese oil companies looked abroad for assets in which to invest for many reasons, chief among them as hedges against price controls at home. The Asian oil market is booming and Chinese companies have built, and are still building, sophisticated refineries to cover the country's increasing demand for gasoline, diesel and jet fuel.
China's Refining Capacity to Outpace the US in 2017
Back in 2000, China’s total refining capacity was estimated with 4.5 million barrels a day, making the country a net importer of refined products. Already by the end of this year, with new-build refinery construction and capacity additions in place, China’s total refining capacity is expected to be just under 10 million barrels a day. Given all capacity expansion and addition plans are carried out as planned, the country could see its total refinery capacity rise to 13.5 million barrels within the next five years (by contrast, the United States is expected to be able to refine 19.1 million barrels by 2017).
PetroChina, and its parent Chinese National Petroleum have been busily extending their refining network to foreign markets. The first drumbeat was the purchase of a 49% stake in Japan’s Osaka refinery from Nippon Oil in 2009, followed by acquisitions in Europe and Asia...
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