China's three largest oil firms are upgrading their facilities to accommodate more Group II base oil production
CNOOC, PetroChina, and Sinopec are making large-scale upgrades to plants all around China to allow for more Group II base oil production, according to C1 Energy's Nancy Shi. The move follows the upwards trend of Group II base oil production, which grew by nearly 2% year-on-year over the past 12 months. Though Group II base oils still comprises 35.6% of overall production, the increase to some 6.7% of Group III shows a market increase in high-viscosity oils.
Presenting at the recent ICIS Base Oils and Lubes Conference in Seoul, Shi said that PetroChina will install hydrocrackers in Daqing Petrochemical, Dalian Petrochemical, Fushun Petrochemical and Lanzhou Refinery, to realize Group II production. Sinopec's Yanshan Petrochemical is also installing hydrocrackers with a view to increase Group II base oil production to 300,000mt/yr in 2011, while CNOOC is also building a new facility for Group II production in Huizhou, which is set to have a 400,000kt/yr capacity after expansion.
Sinopec also announced construction of a new CNY100bn ($15.4bn) refinery in Lianyungang in Jiangsu province which will add a further 32m ton capacity to the country's largest refiner's output. The site will intially focus on p-xylene production - a Benzine-based hydrocarbon.