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The planned shutdown of the entire 410,000 bpd Dalian Petrochemical plant, representing 3% of the countrys total refinery output, comes as Chinese refiners struggle with overcapacity
SINGAPORE - PetroChina is set to shut its largest refinery in north Chinas Dalian around mid-2025, marking the first major closure at a state-run oil plant, part of a long-mooted project to replace it with a smaller facility at a new site, sources said.
The planned shutdown of the entire 410,000 barrels per day (bpd) Dalian Petrochemical plant, representing 3% of the countrys total refinery output, comes as Chinese refiners struggle with overcapacity and weakened fuel demand from slowing economic growth and the electrification of its car fleet.
PetroChina has already shut in 210,000 bpd, or about half of the plants total crude processing capacity at its Dalian Petrochemical subsidiary, said the sources, declining to be named as the matter is not public.
PetroChina did not immediately respond to a request for comment.
The closures are part of a long-proposed plan pushed by Dalian to relocate the refinery, which is in a densely populated area near downtown, after several deadly accidents including a major oil spill in 2010, an explosion in 2013 and a fire in 2017, the sources said.
Under a framework agreement announced by Dalian authorities in November 2022, CNPC, parent of PetroChina, agreed to build a new 70-billion yuan ($9.84 billion) refinery and chemical complex on Changxing island, about two hours drive from downtown Dalian.
The new project would encompass a 200,000 bpd crude refinery, which is half the current plants capacity, and a 1.2 million ton-per-year ethylene complex, Dalians government said at the time.
However, the project remains at a pre-feasibility stage and PetroChina has not taken a final investment decision, said two of the sources.
PetroChina earlier this month shut a 90,000 bpd crude distillation unit (CDU) indefinitely at Dalian, sources said, one of the countrys oldest refineries, with history dating to 1933.
This follows closure of a 120,000-bpd CDU around October last year, sources said, leaving the third and the last unit, a 200,000-bpd CDU running.
"The shutdowns are based on a pre-set timeline," said a senior industry executive with direct knowledge of the matter. |
