rongsheng refinery start up pricelist

Meanwhile, feedstock consumption at China"s independent refineries in eastern Shandong province fell a marginal 0.4% year on year to 121.3 million mt in 2021, data from local information provider JLC showed. However, crude feedstock consumption fell 4.6% to 111.53 million mt over the same period as fewer crude import quotas were allocated to Shandong"s independent refineries in 2021, with four receiving no allocation in the last batch announced in mid-October. To address the feedstock shortage, fuel oil and bitumen blend were imported and cracked as supplement feedstocks in 2021, with 8.5 million mt cracked by Shandong independent refineries in the year, surging from a small volume the year before.

The integrated Zhejiang Petroleum & Chemical refinery continued to raise its crude throughput to around 2.84 million mt in December, up 7.2% from 1.72 million mt in November, which was up 54% from October, according to JLC data. The refinery ramped up throughput after it was allocated more quotas in late October.

The Hengli Petrochemical (Dalian) Refinery in Liaoning province also raised its throughput by 3.6% month on month to 1.7 million mt in December. This comes after the completion of the maintenance at its secondary units, according to refinery sources.

However, Shandong independent refineries have gradually started to cut crude throughput from around Jan. 22 in response to a directive to cap utilization below 70% during the Winter Olympics, as Beijing aims to ensure that emissions remain under control, refinery sources told S&P Global Platts. But some refinery sources believe the overall impact will not be much more than what occurs every year since the Winter Olympics will be held around the Lunar New Year holidays, when independent refineries are forced to cut crude throughput due to logistics and manpower constraints.

In other news, Sinopec"s Hainan Petrochemical refinery in southern China is expected to export about 50,000 mt of refined oil products in January 2022, according to a refinery source. This was down 55% from 110,000 mt planned for export in December 2021.

PetroChina"s West Pacific Petrochemical Corp. refinery will skip gasoil exports in January after skipping them in December and November due to good demand in the domestic market.

PetroChina"s flagship refinery Dalian Petrochemical in northeastern Liaoning province will raise its gasoline exports to 160,000 mt in January, according to sources with knowledge of the matter. This will be about 357% higher than its planned exports in December. Dalian will double jet fuel exports to 80,000 mt in January, from 40,000 mt last month. Dalian plans to process around 1.3 million mt of crudes in January, translating to 75% of its nameplate capacity, stable on the month.

** Sinochem has been in the process of starting up its 12 million mt/year CDU and related refining units at its Quanzhou Petrochemical facility in southern Fujian province, according to a source with knowledge of the matter Jan. 19. The refining and petrochemical units were shut at around Dec. 1, 2021 for maintenance, which lasted for about 40-50 days, according to the maintenance schedule. The refinery will likely process about 450,000 mt to 500,000 mt of crudes for the remainder of February, compared with around 1.2 million mt during normal months.

** Sinopec"s Guangzhou Petrochemical restarted its 8 million mt/year CDU on Dec. 21 following the completion of a scheduled maintenance which started late October, a company source said. With its resumption, the refiner lifted December throughput to 840,000 mt from 440,000 mt in November, the source said. Moreover, the S-zorb that caught fire Nov. 27 during maintenance was fixed and resumed operation, the source added.

** Sinopec"s Fujian Refining and Chemical Co. refinery in southeastern Fujian province has been in the process of restarting from a scheduled maintenance this week, according to a source with knowledge of the matter Jan. 19. The refinery was expected to return to normal operations around Jan. 20, about nine days behind schedule, mainly due to the slow progress in procuring some parts, the source added. The 4 million mt/year crude distillation unit, as well as some secondary units, including the aromatics units, were to be restarted along the way. Following the restart of the CDU, the crude throughput at the refinery will likely increase to around 750,000 mt in January, or 63% of its nameplate capacity. This compares with a run rate of 56%, or 660,000 mt, in December 2021.

** Japan"s ENEOS said Dec. 28 it plans to shut the sole crude distillation unit at its Marifu refinery in the west in late January for scheduled maintenance until early March 2022.

** Idemitsu Kosan restarted the sole 160,000 b/d crude distillation unit at its Aichi refinery in central Japan on Dec. 5 after completing planned maintenance, a spokesperson said Dec. 20.

** PetroChina"s Yunnan Petrochemical refinery in southwestern Yunnan province, has shut its 4 million mt/year residual hydrogenation unit and some of its relative downstream facilities due to a blast. The blast hit the residual hydrogenation unit Dec. 13 morning, according to a press release issued by the Anning city local government in Yuannan. A refining engineer said the closure of residual hydrogenation unit would cut about 30% of the refinery"s daily production.

** Sinopec"s Hainan Petrochemical refinery in southern China plans to completely shut for scheduled maintenance over March-April 2022, a source with the refinery said. This is a routine maintenance that is normally carried out by Chinese refineries every three to four years, according to the source. Sinopec Hainan refinery last carried out complete maintenance over November 2017-January 2018.

** Japan"s ENEOS said it will decommission the 120,000 b/d No. 1 CDU at its 270,000 b/d Negishi refinery in Tokyo Bay in October 2022. It will also decommission secondary units attached to the No. 1 CDU, including a vacuum distillation unit and fluid catalytic cracker. ENEOS will also decommission a 270,000 mt/year lubricant output unit at the Negishi refinery.

** Sinopec is looking to launch its 2 million mt/year crude distillation unit expansion at Luoyang Petrochemical in central China in January, with a new crude pipeline able to supply sufficient feedstock, a refinery source said late December. "We have reconfigured an existing crude pre-treater into a 2 million mt/year CDU to increase the primary capacity to 10 million mt/year. The start-up will be in the next month with the crude pipeline having been put into use in November," the refinery source said. The expansion was initially set to be put into use in H2 2020, but was delayed to H1 2021 due to construction of the 10 million mt/year Rizhao-Puyang-Luoyang crude pipeline and weak demand in oil product market, Platts reported. The source said the expansion needs more crude supplies discharged from Rizhao port in Shandong province and transmitted through the Rizhao-Puyang-Luoyang crude pipeline.

** Chinese Sinopec"s refinery Zhenhai Refining and Chemical currently has a 27 million mt/year refining capacity and a 2.2 million mt/year ethylene plant, after its phase 1 expansion project of 4 million mt/year crude distillation unit and a 1.2 million mt/year ethylene unit was delivered end-June.

** PetroChina"s Guangxi Petrochemical in southern Guangxi province plans to start construction at its upgrading projects at the end of 2021, with the works set to take 36 months. The projects include upgrading the existing refining units as well as setting up new petrochemical facilities, which will turn the refinery into a refining and petrochemical complex. The project will focus on upgrading two existing units: the 2.2 million mt/year wax oil hydrocracker and the 2.4 million mt/year gasoil hydrogenation refining unit. For the petrochemicals part, around 11 main units will be constructed, which include a 1.2 million mt/year ethylene cracker.

** Sinopec"s Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer in 2021 and to bring its port upgrading project online by end-December.

** China"s privately held refining complex, Shenghong Petrochemical, is likely to start feeding crudes into its newly built 16 million mt/year crude distillation unit, according to a company source in early January. The refinery initially planned to start up at the end of August, but this was postponed to the end of December due to slower-than-expected construction work, and then again to around the Lunar New Year. The construction of the complex started in December 2018. Located in the coastal city of Lianyungang in Jiangsu province, the company"s 16 million mt/year CDU is the country"s single biggest by capacity.

** Chinese privately owned refining and petrochemical complex Zhejiang Petroleum & Chemical has fully started up commercial operation at it 400,000 b/d Phase 2 refining and petrochemical project, parent company Rongsheng Petrochemical said in a document Jan. 12. There are two crude distillation units in the Phase 2 project, each with a capacity of 200,000 b/d. ZPC started trial run at one of the CDUs in November 2020. Due to tight feedstock supplies, the refiner could not feed the other CDU until the end of November 2021, when it gained crude import quota for the project. The nameplate capacity of the company doubled to 800,000 b/d in Phase 2. It will run four CDUs at about 82% of nameplate capacity in January. Rongsheng said Phase 2 adds 6.6 million mt/year aromatics and 1.4 million mt/year ethylene production capacity.

** Saudi Aramco continues to pursue and develop the integrated refining and petrochemical complex in China with Norinco Group and Panjin Sinchen. The joint venture plans to build an integrated refining and petrochemical complex in northeast China"s Liaoning province Panjin city with a 300,000 b/d refinery, 1.5 million mt/year ethylene cracker and a 1.3 million mt/year PX unit.

** Honeywell said China"s Shandong Yulong Petrochemical will use "advanced platforming and aromatics technologies" from Honeywell UOP at its integrated petrochemical complex. The complex will include a UOP naphtha Unionfining unit, CCR Platforming technology to convert naphtha into high-octane gasoline and aromatics, Isomar isomerization technology. When completed Yulong plans to produce 3 million mt/yr of mixed aromatics. Shandong"s independent greenfield refining complex, Yulong Petrochemical announced the start of construction work at Yulong Island in Yantai city at the end of October 2020.

Construction work is expected to be completed in 24 months. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province. A total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical, Yuhuang Petrochemical and Zhonghai Fine Chemical will be dismantled, while Jinshi Asphalt has already finished dismantling.

** PetroChina officially started construction works at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on Dec. 5, 2018.

** China"s coal chemical producer Xuyang Group has announced plans to build a greenfield 15 million mt/year refining and petrochemical complex in Tangshang in central Hebei province.

"Everyone wants to transition, and there is huge pressure to quit fossil fuels, but fossil fuels represent 80% of the energy supply today on the planet," Pouyanne said in a fireside chat during the remotely held S&P Global Energy Summit.

And while it is better from a climate perspective to generate power from gas instead of coal, the challenge for gas usage is reducing methane emissions, he said. Gas-fired power plants are controllable assets that can ramp up and down, which helps deal with renewable energy intermittency, and although batteries can help, long-duration energy storage remains a difficult challenge, Pouyanne said.

According to MRC"s ScanPlast report, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

The changing roles played by China’s independent refineries are reflected in their relations with Middle East suppliers. In the battle to ensure their profitability and very survival, smaller Chinese teapots have adopted various measures, including sopping up steeply discounted oil from Iran. Meanwhile, Middle East suppliers, notably Saudi Aramco, are seeking to lock in Chinese crude demand while pursuing new opportunities for further investments in integrated downstream projects led by both private and state-owned companies.

Four years later, the NDRC adopted a different approach, awarding licenses and quotas to teapot refiners to import crude oil and granting approval to export refined products in exchange for reducing excess capacity, either upgrading or removing outdated facilities, and building oil storage facilities.[10] But this partial liberalization of the refining sector did not go exactly according to plan. Swelling with new sources of feedstock that catapulted China into the position of the world’s largest oil importer, teapots increased their production of refined fuels and, benefiting from greater processing flexibility and low labor costs undercut larger state rivals and doubled their market share.[11]

2021 marked the start of the central government’s latest effort to consolidate and tighten supervision over the refining sector and to cap China’s overall refining capacity.[14] Besides imposing a hefty tax on imports of blending fuels, Beijing has instituted stricter tax and environmental enforcement[15] measures including: performing refinery audits and inspections;[16] conducting investigations of alleged irregular activities such as tax evasion and illegal resale of crude oil imports;[17] and imposing tighter quotas for oil product exports as China’s decarbonization efforts advance.[18]

The politics surrounding this new class of greenfield mega-refineries is important, as is their geographical distribution. Beijing’s reform strategy is focused on reducing the country’s petrochemical imports and growing its high value-added chemical business while capping crude processing capacity. The push by Beijing in this direction has been conducive to the development of privately-led mega refining and petrochemical projects, which local officials have welcomed and staunchly supported.[20]

Yet, of the three most recent major additions to China’s greenfield refinery landscape, none are in Shandong province, home to a little over half the country’s independent refining capacity. Hengli’s Changxing integrated petrochemical complex is situated in Liaoning, Zhejiang’s (ZPC) Zhoushan facility in Zhejiang, and Shenghong’s Lianyungang plant in Jiangsu.[21]

As China’s independent oil refining hub, Shandong is the bellwether for the rationalization of the country’s refinery sector. Over the years, Shandong’s teapots benefited from favorable policies such as access to cheap land and support from a local government that grew reliant on the industry for jobs and contributions to economic growth.[22] For this reason, Shandong officials had resisted strictly implementing Beijing’s directives to cull teapot refiners and turned a blind eye to practices that ensured their survival.

But with the start-up of advanced liquids-to-chemicals complexes in neighboring provinces, Shandong’s competitiveness has diminished.[23] And with pressure mounting to find new drivers for the provincial economy, Shandong officials have put in play a plan aimed at shuttering smaller capacity plants and thus clearing the way for a large-scale private sector-led refining and petrochemical complex on Yulong Island, whose construction is well underway.[24] They have also been developing compensation and worker relocation packages to cushion the impact of planned plant closures, while obtaining letters of guarantee from independent refiners pledging that they will neither resell their crude import quotas nor try to purchase such allocations.[25]

To be sure, the number of Shandong’s independent refiners is shrinking and their composition within the province and across the country is changing — with some smaller-scale units facing closure and others (e.g., Shandong Haike Group, Shandong Shouguang Luqing Petrochemical Corp, and Shandong Chambroad Group) pursuing efforts to diversify their sources of revenue by moving up the value chain. But make no mistake: China’s teapots still account for a third of China’s total refining capacity and a fifth of the country’s crude oil imports. They continue to employ creative defensive measures in the face of government and market pressures, have partnered with state-owned companies, and are deeply integrated with crucial industries downstream.[26] They are consummate survivors in a key sector that continues to evolve — and they remain too important to be driven out of the domestic market or allowed to fail.

In 2016, during the period of frenzied post-licensing crude oil importing by Chinese independents, Saudi Arabia began targeting teapots on the spot market, as did Kuwait. Iran also joined the fray, with the National Iranian Oil Company (NIOC) operating through an independent trader Trafigura to sell cargoes to Chinese independents.[27] Since then, the coming online of major new greenfield refineries such as Rongsheng ZPC and Hengli Changxing, and Shenghong, which are designed to operate using medium-sour crude, have led Middle East producers to pursue long-term supply contracts with private Chinese refiners. In 2021, the combined share of crude shipments from Saudi Arabia, UAE, Oman, and Kuwait to China’s independent refiners accounted for 32.5%, an increase of more than 8% over the previous year.[28] This is a trend that Beijing seems intent on supporting, as some bigger, more sophisticated private refiners whose business strategy aligns with President Xi’s vision have started to receive tax benefits or permissions to import larger volumes of crude directly from major producers such as Saudi Arabia.[29]

The shift in Saudi Aramco’s market strategy to focus on customer diversification has paid off in the form of valuable supply relationships with Chinese independents. And Aramco’s efforts to expand its presence in the Chinese refining market and lock in demand have dovetailed neatly with the development of China’s new greenfield refineries.[30] Over the past several years, Aramco has collaborated with both state-owned and independent refiners to develop integrated liquids-to-chemicals complexes in China. In 2018, following on the heels of an oil supply agreement, Aramco purchased a 9% stake in ZPC’s Zhoushan integrated refinery. In March of this year, Saudi Aramco and its joint venture partners, NORINCO Group and Panjin Sincen, made a final investment decision (FID) to develop a major liquids-to-chemicals facility in northeast China.[31] Also in March, Aramco and state-owned Sinopec agreed to conduct a feasibility study aimed at assessing capacity expansion of the Fujian Refining and Petrochemical Co. Ltd.’s integrated refining and chemical production complex.[32]

Commenting on the rationale for these undertakings, Mohammed Al Qahtani, Aramco’s Senior Vice-President of Downstream, stated: “China is a cornerstone of our downstream expansion strategy in Asia and an increasingly significant driver of global chemical demand.”[33] But what Al Qahtani did notsay is that the ties forged between Aramco and Chinese leading teapots (e.g., Shandong Chambroad Petrochemicals) and new liquids-to-chemicals complexes have been instrumental in Saudi Arabia regaining its position as China’s top crude oil supplier in the battle for market share with Russia.[34] Just a few short years ago, independents’ crude purchases had helped Russia gain market share at the expense of Saudi Arabia, accelerating the two exporters’ diverging fortunes in China. In fact, between 2010 and 2015, independent refiners’ imports of Eastern Siberia Pacific Ocean (ESPO) blend accounted for 92% of the growth in Russian crude deliveries to China.[35] But since then, China’s new generation of independents have played a significant role in Saudi Arabia clawing back market share and, with Beijing’s assent, have fortified their supply relationship with the Kingdom.

Smaller Chinese independents have been less fortunate, hit hard not just by tougher domestic regulation but by soaring crude oil prices.[36] US-led sanctions flowing from the war in Ukraine have compounded the pressure on teapots, which prior to the conflict had sourced about a fifth of their crude oil from Russia. Soaring oil tanker freight rates and the refusal of Chinese banks to issue letters of credit for Russian crude have choked off much of this supply, though some private refiners have compensated by using cash transfers to pay for Russian ESPO blend crude.[37]

Meanwhile, though, enticed by discounted prices Chinese independents in Shandong province have continued to scoop up sanctioned Iranian oil, especially as their domestic refining margins have thinned due to tight regulatory scrutiny. In fact, throughout the period in which Iran has been under nuclear-related sanctions, Chinese teapots have been a key outlet for Iranian oil, which they reportedly unload from reflagged vessels representing themselves as selling oil from Oman and Malaysia.[38] China Concord Petroleum Company (CCPC), a Chinese logistics firm, remained a pivotal player in the supply of sanctioned oil from Iran, even after it was blacklisted by Washington in 2019.[39] Although Chinese state refiners shun Iranian oil, at least publicly, because of US sanctions, private refiners have never stopped buying Iranian crude.[40] And in recent months, teapots have been at the forefront of the Chinese surge in crude oil imports from Iran.[41]

As Chinese private refiners’ number, size, and level of sophistication has changed, so too have their roles not just in the domestic petroleum market but in their relations with Middle East suppliers. Beijing’s import licensing and quota policies have enabled some teapot refiners to maintain profitability and others to thrive by sourcing crude oil from the Middle East. For their part, Gulf producers have found Chinese teapots to be valuable customers in the spot market in the battle for market share and, especially in the case of Aramco, in the effort to capture the growth of the Chinese domestic petrochemicals market as it expands.

SINGAPORE, Oct 14 (Reuters) - Rongsheng Petrochemical, the trading arm of Chinese private refiner Zhejiang Petrochemical, has bought at least 5 million barrels of crude for delivery in December and January next year in preparation for starting a new crude unit by year-end, five trade sources said on Wednesday.

Rongsheng bought at least 3.5 million barrels of Upper Zakum crude from the United Arab Emirates and 1.5 million barrels of al-Shaheen crude from Qatar via a tender that closed on Tuesday, the sources said.

Rongsheng’s purchase helped absorbed some of the unsold supplies from last month as the company did not purchase any spot crude in past two months, the sources said.

Zhejiang Petrochemical plans to start trial runs at one of two new crude distillation units (CDUs) in the second phase of its refinery-petrochemical complex in east China’s Zhoushan by the end of this year, a company official told Reuters. Each CDU has a capacity of 200,000 barrels per day (bpd).

Zhejiang Petrochemical started up the first phase of its complex which includes a 400,000-bpd refinery and a 1.2 million tonne-per-year ethylene plant at the end of 2019. (Reporting by Florence Tan and Chen Aizhu, editing by Louise Heavens and Christian Schmollinger)

SINGAPORE, Dec 29 (Reuters) - A major crude oil pipeline connecting a storage farm in east China"s Zhoushan of Zhejiang province to mega private refiner Zhejiang Petrochemical Corp (ZPC) started pumping oil for the first time on Wednesday, local state media reported.

The pipeline cost 1.6 billion yuan ($229.44 million) to build, with investment from Zhejiang Petroleum Co Ltd, a unit under state-run Zhejiang Energy Group, and two other local firms.

The pipeline has a diameter of 0.8 meter, spanning 800 meters over land and 45.7 kilometers under the sea. It starts at the Huangzeshan crude oil storage base and ends at the ZPC refinery, which is China"s single-largest refiner with daily processing capacity of 800,000 barrels.

The Huangzeshan storage base started operating in October with crude oil and refined fuel tanks, with total capacity of 1.51 million cubic meters, or about 9.5 million barrels, Zhoushan government has said.

Plans for a joint Saudi Arabia-China refining and petrochemical complex to be built in northeast China that were shelved in 2020 are now being discussed again, according tosources close to the deal. The original deal for Saudi Aramco and China’s North Industries Group (Norinco) and Panjin Sincen Group to build the US$10 billion 300,000 barrels per day (bpd) integrated refining and petrochemical facility in Panjin city was signed in February 2019. However, in the aftermath of the enduring low prices and economic damage that hit Saudi Arabia as a result of the Second Oil Price War it instigated in the first half of 2020 against the U.S. shale oil threat, Aramco pulled out of the deal in August of that year.

The fact that this landmark refinery joint venture is back under serious consideration underlines the extremely significant shift in Saudi Arabia’s geopolitical alliances in the past few years – principally away from the U.S. and its allies and towards China and its allies. Up until the 2014-2016 Oil Price War, intended by Saudi Arabia to destroy the then-nascent U.S. shale oil sector, the foundation of U.S.-Saudi relations had been the deal struck on 14 February 1945 between the then-U.S. President Franklin D. Roosevelt and the Saudi King Abdulaziz. In essence, but analyzed in-depth inmy new book on the global oil markets,this was that the U.S. would receive all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the ruling House of Saud and, by extension, of Saudi Arabia.

After the end of the 2014-2016 Oil Price War, Saudi Arabia had not only lost the upper hand in global oil markets that it had established alongside other OPEC member states with the 1973 Oil Embargo but it had also prompted a catastrophic breach of trust with its former allies in Washington. Consequently, the U.S. changed the effective terms of 1945 to: the U.S. will safeguard the security both of Saudi Arabia and of the ruling House of Saud for as long as Saudi not only guarantees that the U.S. will receive all of the oil supplies it needs for as long as Saudi has oil in place but also that Saudi Arabia does not attempt to interfere with the growth andprosperity of the U.S. shale oil sector. Shortly after that (in May 2017), the U.S. assured the Saudis that it would protect them against any Iranian attacks, provided that Riyadh also bought US$110 billion of defense equipment from the U.S. immediately and another US$350 billion worth over the next 10 years. However, the Saudis then found out that none of these weapons were able to prevent Iran from launchingsuccessful attacksagainst its key oil facilities in September 2019, or several subsequent attacks.

Concomitant with this weakening of relations between Saudi Arabia and the U.S. came a drift towards Russia first and then China. Given the reputational damage done to the perceived power of Saudi Arabia and its OPEC brothers by their inability to destroy or disable the growing threat from U.S. shale oil to their former dominance in the global oil markets, their attempts to pull oil prices back up to levels at which they could begin to repair thedamage done to their economiesby the 2014-2016 Oil Price War towards the end of 2016 also failed. At that point, fully cognisant of the enormous economic and geopolitical possibilities that were available to it by becoming a core participant in the crude oil supply/demand/pricing matrix, Russia agreed to support the OPEC production cut deal in what was to be called from then-on ‘OPEC+’, albeit in its own uniquely self-serving and ruthless fashion, again analyzed in-depth inmy new book on the global oil markets.

Given Russia’s significant leverage in the Middle East by dint of its pivotal position in making the OPEC deal credible in terms of being able to affect global oil prices, China also began to more aggressively leverage its own power with the group and in the region by dint of its being the world’s biggest net importer of crude oil and its increasing use of checkbook diplomacy. Nowhere were the two elements more in evidence than in China’s offer to buy the entire 5 percent stake of Aramco in a private placement. This was designed to enable Saudi Crown Prince Mohammed bin Salman to save face, given hisunsuccessful attempts from 2016 to 2020to persuade serious Western investors to have any significant part in the company’s initial public offering. Shortly after the offer was made,China was referred toby Saudi’s then-vice minister of economy and planning, Mohammed al-Tuwaijri, as: “By far one of the top markets” to diversify the funding basis of Saudi Arabia. He added that: “We will also access other technical markets in terms of unique funding opportunities, private placements, panda bonds and others.” In a similar vein, andjust last year, Saudi Aramco’s chief executive officer, Amin Nasser, said: “Ensuring the continuing security of China’s energy needs remains our [Saudi Aramco’s] highest priority — not just for the next five years but for the next 50 and beyond.”

Later, the first discussions about the joint Saudi-China refining and petrochemical complex in China’s northeast began, with a bonus for Saudi Arabia being that Aramco was intended to supply up to 70 percent of the crude feedstock for the complex that was to have commenced operation in 2024. This, in turn, was part of a multiple-deal series that also included three preliminary agreements to invest in Zhejiang province in eastern China. The first agreement was signed to acquire a 9 percent stake in the greenfield Zhejiang Petrochemical project, the second was a crude oil supply deal signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, and the third was with Zhejiang Energy to build a large-scale retail fuel network over five years in Zhejiang province.

This latest Aramco-Norinco-Panjin Sincen deal, though, carries with it even broader ramifications of a much more overtly testing nature for U.S. President Joe Biden in terms of where he draws the line on supposed allies blurring trade considerations and security considerations. All Chinese companies function as part of the State apparatus – without any exception – and Norinco has the added troubling element for the U.S. that it is one of China’s major defense contractors, specializing in the full range of research, development, and production of military equipment, technology, systems, and weapons. This runs alongside ongoing concerns from Washington about Saudi Arabia’s on again-off again agreement with Russia tobuy its S-400 missile defense system, and much more recent news in December 2021 that Saudi Arabia is now actively manufacturing itsown ballistic missiles with the help of China.

New refinery start-ups in China are helping to absorb some of the crude oil from the Middle East amid an otherwise depressed market with stalled demand recovery.

Rongsheng Petrochemical, the trading arm of Zhejiang Petrochemical, has bought at least 5 million barrels of UAE’s Upper Zakum crude and Qatar’s al-Shaheen crude in a tender this week, trading sources told Reuters. According to traders who spoke to Bloomberg, Rongsheng Petrochemical has purchased at least 7 million barrels of crude from the Middle East.

The company was looking to procure oil from the Middle East as it prepares to begin trial runs at a new refinery by the end of this year, sources told Reuters.

Chinese refiners went on a buying spree this spring, taking advantage of the lowest crude oil prices in decades in April to snap up cargoes for delivery in the summer months. As a result, China imported record volumes of crude oil in May and June. Yet, the bargain-hunting for dirt cheap oil resulted in queues at Chinese ports with tankers waiting for weeks to discharge crude that had likely been loaded three to four months ago.

Saudi Aramco today signed three Memoranda of Understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China. The company aims to acquire a 9% stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical. Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.

Phase I of the project will include a newly built 400,000 barrels per day refinery with a 1.4 mmtpa ethylene cracker unit, and a 5.2 mmtpa Aromatics unit. Phase II will see a 400,000 barrels per day refinery expansion, which will include deeper chemical integration than Phase I.

China Merchants Energy Shipping (CMES), the energy transport unit of China Merchants Group, has signed a agreement with Rongsheng Petrochemical to form a strategic partnership.

Under the agreement, the two companies will jointly develop cooperation opportunities in the area of shipping, logistics, and financing, especially for the Rongsheng’s Zhoushan Green Petrochemical Base project, which started a trial operation recently.

Zhoushan Green Petrochemical Base project is a new integrated refinery and petrochemical project on Zhoushan Island, and it is set to become one of the world’s largest crude-to-chemicals complex.

China ramped up oil product exports in October even as refiners elsewhere struggle to stay on their feet in what is set to be the new norm as the global refining sector faces up to unrelenting Chinese expansion and COVID-19-induced fuel demand decimation, according to industry sources and government data.

The newly-built highly-integrated mega Chinese refinery-cum-petrochemical complexes are immensely more efficient than the 50-60 year-old clunkers that they are replacing across the globe spanning from the U.S. west coast to the Philippines, bringing a new paradigm to the oil market, they said.

“We have these new refineries coming up in China that were planned 3-5 years ago but China does not need the extra capacity right now, the world also does not need it. We are going to see margins getting worse for refiners in the region and more capacity will be shut,” said one trading source.

The world’s largest crude oil importer shipped out 4.52 million mt of gasoline, diesel and jet-kerosene in October, up 73% from the 2.62 million mt exported in September, General Administration of Customs data showed. The volumes were little changed from a year ago, which were weighed by a 72% collapse in jet-kerosene shipments due to the virtual grounding of international air travel.

Yet at the same time, Chinese refiners, set to become the biggest global refining center at the expense of the U.S., cranked up runs to a record-high of 59.82 million mt, or about 14.15 million b/d, in October even as domestic demand failed to live up to expectations during the autumn holiday season.

“Chinese refineries are not intentionally built or designed to serve the overseas market in the first place, until now many refineries see the export market as their last resort, or a valve to clear up any surplus,” saidFeng Xiaonan, IHS Markit downstream analyst in Beijing.

“The reason is multi-fold, 1. They can bear lower product cracks by leveraging on the more profitable chemicals side. 2. Economies of scale. 3. High production flexibility, e.g. they can intentionally gear up their oil product yield when the market is in favor of these products and vice versa,” she said.

So far in Asia, Royal Dutch Shell announced the closure of its 60-year-old 110,000 b/d Tabangao refinery in the Philippines and plans to cut capacity by half at its biggest 500,000 b/d facility in Singapore. Shell said it aims to have just six integrated refineries by 2025.

BP Australia earlier said it would convert its 152,000 b/d Kwinana refinery in Western Australia into an import terminal. Ampol said Oct. 8 it is studying a similar conversion of its 109,000 b/d Lytton site, echoing a statement by Refining NZ, the sole operator in New Zealand. The Australian government last month announced plans to subsidize refiners as long as they maintain operations in Australia, days after Viva said it may shut the 120,000 b/d Geelong site.

One of the export quota recipient, Zhejiang Petrochemical Corp. (ZPC) was given 1 million mt. The company, which is majority owned by Rongsheng Petrochemical Co., is in the final stages of getting the second phase of its 800,000 b/d refinery up and running.

“One million mt for use in one month is a lot, most of this will end up as gasoline and that will have an impact on the market. We may have to brace for more such news next year,” the trading source said.

Drug makers Pfizer and BioNTech said on Monday that their vaccine was more than 90% effective in preventing COVID-19, raising hopes that the pandemic, which eroded global fuel demand, may be controlled, trading sources said. Crude oil surged on the news with ICE Brent up 6.1% on-day to $42.74/bbl as of 4:30 pm Singapore time.

"It is good news, although the requirement of very low-temperature storage could pose a logistical challenge. This could be the start of the series of new vaccinations under development. These vaccines will help accelerate the fuel demand recovery," said Premasish Das, IHS Markit research and analysis director.

Pressured by weak demand and supply overhang, the benchmark 92 RON crack on Nov. 4 fell to $2.020/bbl, the lowest since Sept. 3, according to OPIS data. It recovered to $2.654/bbl on Tuesday.

"There may be a small uplift in air travel around mid-to-late 2021, assuming travel bans, restrictive measures are lifted, as people rush to travel after being grounded for so long. But then, it will still take time before market confidence returns to 100%," said April Tan, IHS Markit downstream research associate director in Singaporean.

Demand could pick up for bunkers from cruise liners once the vaccine proves to be effective as borders open up and travelling resumes, said some bunker suppliers.

Mobility curbs delayed the commissioning of new plants while supply of propylene from refinery sources was curtailed as refiners cut runs, according to Asia Light Olefins World Analysis - Propylene.

The factors that supported olefins demand also negatively impacted sectors that consume durable goods made from aromatics, including building, construction and furniture while empty roads meant lower demand for gasoline octane boosters MX and toluene.

A bumper 10 million-barrel spot crude oil purchase by Rongsheng Petrochemical suggests it is keen to get the second phase of its massive 40 million mt/yr, or 800,000 b/d, refinery and chemical project at subsidiary Zhejiang Petrochemical Co. Ltd (ZPC) running in the coming months, trading sources said.

Rongsheng announced in August plans to begin trial runs at the second 400,000 b/d tranche of the project in the fourth quarter of 2020 and looks set to achieve this aim despite COVID-19-related construction delays due to social distancing restrictions earlier in the year.

Market participants said Rongsheng was absent from the spot market for a couple of months and returned this week to buy the medium-sour Middle East cargoes, which led some to believe it was restocking but added that the scale of the purchase does point to some use in the new facility.

The refiner bought grades including Upper Zakum, Qatar Marine, Basrah Light, Oman and Al-Shaheen, they said, adding that the cargoes were for delivery mostly in December with some going into January, they said.

The purchase is not a sign of increased crude purchases from China for the final quarter as the nation has still to work through record imports made earlier in the year with deliveries in September coming in at a high 11.8 million b/d, up 2% from 11.2 million b/d in August and well above the 10 million b/d a year ago, according to preliminary data from the General Administration of Customs (GAC).

ZPC completed hoisting several of its major refining units, including the crude distillation unit (CDU), residual hydrotreating unit and diesel hydrotreating unit by the time of this update, IHS Markit said in its Aug. 27 short-term outlook on the China crude market.

"Under normal conditions it would take at least another 4-6 months before they can get the entire plant ready for normal operation, but we can"t exclude the possibility that they may choose to partially startup Phase II in order to meet their stated goal of a 2020 Q4 startup," Feng said on Friday.

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Continuing low refinery runs coupled with the autumnal turnaround season has tightened supplies from across the European barrel since September, creating backwardation in naphtha and gasoline and causing middle distillate differentials to strengthen versus distillate futures, according to OPIS and Intercontinental Exchange pricing.

"The argument is that we are facing a very cold winter, and Japan will need to buy kerosene and refiners have cut production back. China"s domestic aviation market has also bounced back. But I don"t buy it myself because Japan"s tanks are full, and the long haul (flights) sector is still suffering," one trader said. "There was also talk of jet fuel being blended into marine gasoil pools to help support the market."

At the start of September, the November regrade was trading at minus $5.10/bbl, with Singapore FOB jet paper trading the equivalent of around $18.50/mt below Singapore FOB 10ppm sulfur gasoil paper. By the end of the month, the November regrade had bounced higher to minus $3.08/bbl, while FOB jet paper narrowed to just $5/mt below Singapore FOB 10ppm sulfur gasoil, a contraction of $13.50/mt over the month.

But the volatility and liquidity of jet paper raises uncertainty over whether the rally in both the Asian regrade and European paper will hold over the winter. Trading was very thin for Q4 and Q1 jet paper to begin with, although it has started to recover, according to jet fuel traders.

"I am happy to see the differentials higher, but what struck me as odd was the recovery was the recovery was much greater in Q4 and Q1 than next summer," said a refining source. "The whole of the curve has moved up, but if the aviation market is recovering then I would expected to have seen Q2 and Q3 swaps rally as much as if not more than Q4 and Q1, [which is the period] when demand falls off and when there is still no vaccine."

Differentials for jet fuel cargoes arriving into Europe typically trade at a premium of between $20 and $40/mt above distillate futures and have soared to above $80/mt when the market is short of supply. But the forward pricing curve for jet fuel prices collapsed after COVID-19 struck, as the pandemic grounded aircraft while countries went into lockdown to halt the spread of the virus.

Indian refiners are cranking up runs strongly on the back of robust domestic gasoline demand and signs of a recovery in diesel consumption amid speculation that crude throughput may even reach 100% in December, trading sources with knowledge of the matter said.

Refinery runs at the world"s third largest crude oil importer are forecast to increase to 90% in November from around 80-85% in October with further hikes anticipated in December, with one source adding that it could reach 100% due to the combination of renewed diesel and strong gasoline demand.

"Gasoline demand is super high and diesel demand is showing some signs of recovery," one India-based source said, adding that the rebound in diesel consumption has allowed refiners to crank up runs which were earlier hamstrung by limited middle distillate demand.

"Gasoline recovery has been strong and will receive a modest boost from seasonal demand due to the festive seasons. For diesel, the IHS Markit September Manufacturing PMI was 56.8 (4.8 points higher than August), indicating that industrial activities are recovering well, supporting diesel demand," said Kendrick Wee, IHS Markit research and analysis associate director in Singapore.

Diesel sales were down 7% on-year but up 22% from August, which they said portends to possibly flat growth in October and even year-on-year gains by November.

India reduced refinery throughput in August to 16.1 million mt, or 3.82 million b/d, down a hefty 26.4% from a year ago, according to data from the Petroleum Planning & Analysis Cell (PPAC). This works out to 76% of the country"s nameplate 5.02 million b/d capacity and 73.6% of the 5.19 million b/d processed a year ago, the data showed.

Crude oil imports reached 15.2 million mt, around 3.58 million b/d, in August, down 23.4% from a year ago but up by an almost similar margin from July, PPAC data showed. Intake was also the highest since April.

There are no major refinery turnarounds planned in the fourth quarter aside from the month-long shutdown of the 400,000 b/d Vadinar facility in October.

Consequently, if runs are cranked up to full in December, crude oil trades will increase significantly from this month. Already there were signs of increased runs as purchases of November-delivery barrels rose, trading sources said.

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Asia jet fuel crack showed signs of strengthening in recent weeks, albeit still in the negative. Refining margins was at minus $0.05/bbl at the end of last week, up from minus $2.28/bbl on Aug. 31, which was the lowest point in more than three months.

Colder weather over the peak gas demand season of winter could also boost Japan’s LNG demand and offset some of the COVID-19 negative impact on demand for the super chilled fuel this year, traders said.

But the latest colder weather forecast may have already started to turn the tide, a Japanese trader said, citing the emergence of three Japanese utilities in the spot market last week for October and November cargoes.

Egypt"s Middle East Oil Refinery (MIDOR) company, located in Alexandria, has issued a tender to buy 90,000 metric tons of gasoil for October and November delivered into El Dekheila Port, according to a document seen by OPIS amid better-than-expected recovery in the region.

"We started to see some recovery in July/August and recent tenders from MIDOR and Egyptian General Petroleum Corporation (EGPC) are reflecting the recovery, but demand is still lower than last year at this time," said Farrah Boularas, an associate director with IHS Markit Downstream.

MIDOR delivers refined products to the national oil company, EGPC, and the local market. Its refinery has a crude distillation capacity of 100,000 b/d and is one of the newest and most sophisticated of Egypt"s nine operating refineries, according to IHS Markit data. Egypt has a total atmospheric distillation capacity of 737,000 b/d.

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The shutdown of the petchems facility in Scotland is planned to last between five and six weeks, those local sources say, and has been pushed back from a provisional mid-September start date.

Turnarounds at the nearby 210,000-b/d Petronineos-operated refinery and the petchem plant were originally scheduled for April this year, but the onset of the COVID-19 pandemic scotched those plans.

One source told OPIS that a short period of maintenance work on a 110,000-b/d crude distillation unit at the refinery was about to end, and so many workers engaged in that project will be redeployed to work on the forthcoming petchems plant shutdown.

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"Basically there is still a lot of inventory to be cleared up, gasoil is still worrisome considering its half of production and gasoline as well. However, there are some chances to increase runs in November. The festival season calls for it," said one refining source based in India.

India, the second-largest crude oil importer in Asia, reduced refinery throughput in August to 16.1 million mt, or 3.82 million b/d, down a hefty 26.4% from a year ago, according to data from the Petroleum Planning & Analysis Cell (PPAC). This works out to 76% of the country"s nameplate 5.02 million b/d capacity and 73.6% of the 5.19 b/d processed a year ago, the data showed.

Crude oil imports reached 15.2 million mt, around 3.58 million b/d, in August, down 23.4% from a year ago but up by an almost similar margin from July, PPAC data showed. Intake was also the highest since April.

Diesel sales by Indian Oil Corp. (IOC), Bharat Petroleum Corp. Ltd. (BPCL) and Hindustan Petroleum Corp. Ltd. (HPCL) edged up 19.7% from 1H August to 2.13 million mt, while gasoline and jet fuel rose 7.2% and 21.3% to 965,000 mt and 125,000 mt, respectively, according to data from the suppliers.

"We expect the demand recovery to continue and that would support higher refinery runs in October/November. However, from a year-on-year point of view, there is still a long a way to go to reach the 2019 level," said Premasish Das, IHS Markit research and analysis director.

IHS Markit estimates September refinery runs at 4.1 million b/d, rising to 4.4 million b/d in October/November, Das said, adding that the forecast may be slightly on the optimistic side.

However, the unrelenting spread of COVID-19 cases has cast a cloud over the upcoming festivities and some are questioning if expectations of exuberance and the accompanying surge in fuel consumption may be over stated especially as attendances at newly re-opened schools were poor, according to a Press Trust of India report.

Major Indian refiners such as IOC and Reliance Industries have in the past month restarted large facilities at Panipat and Jamnagar, respectively, which should raise crude throughput going forward, the sources said.

Gain greater transparency into Asia-Pacific markets for more strategic buy and sell decisions on refinery feedstocks, LPG and gasoline with the OPIS Asia Naphtha & LPG Report.

An OPEC+ move to extend the compensation period for nations that failed to fulfill output cuts to end-December suggest that the UAE, one of the bigger violator, is likely to stretch already announced crude oil supply reductions in October and November into December, trading sources said.

UAE Energy Minister Suhail Al Mazroui said the over production was due to peak summer power demand and announced in a Sept. 1 tweet of supply cuts. The Adnoc announcement, combined with stricter compliance and compensation by Iraq, has in recent days bolstered Middle East crude oil prices, the sources said.

Murban, the UAE"s single-largest crude blend, was last estimated at around $0.20/bbl above its OSP compared with a discount of about $0.70/bbl last month, the source said, adding that some of the gains were also due to the deep cuts made in the latest round of OSP announcements. Upper Zakum, another big export grade, was at around plus $0.10/bbl versus minus $0.70/bbl a month ago.

The price bump were triggered by the cut to supplies which caused an initial knee-jerk buy reaction that reverberated across the various spot traded crude oil markets in the region leading to higher flat prices and firmer time spreads.

On the other hand, Basrah crude from Iraq has been losing ground in anticipation of increased supply for November after the country managed to claw back a significant portion of its over production in August and now in September, the sources said.

In its statement on Thursday following a Joint Ministerial Monitoring Committee (JMMC) meeting under the leadership of the Saudi and Russia oil ministers, the group said that the monthly report prepared by its Joint Technical Committee (JTC) showed overall compliance by participating OPEC and non-OPEC countries at 102% in August 2020, including Mexico as per the secondary sources.

However, it said the group was looking closely at market developments particularly as new cases of COVID-19 spread in many countries affecting fuel demand. In its monthly report, OPEC downgraded global oil demand further by 400,000 b/d, now contracting by 9.5 million b/d to 90.2 million b/d.

The need for better compliance and compensation was driven hard by the Saudi oil minister who warned nations against over producing and then making up for their indiscretions in a news briefing after the meeting, according to several media reports.

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Saudi Aramco reduced its October liquefied petroleum gas (LPG) term supplies, on a voluntary basis, amid regional demand lulls after keeping allocations in line with nominations for two months amid higher overall term contract volumes for the full year from 2019, according to sources.

Aramco set in end-Aug. its September Contract Price (CP) for propane at $360/mt, unchanged from August and butane at $355/mt, up $10/mt on-month, as term discussions for next year got started. No cancellations of term cargoes were reported for September.

The kingdom slashed term cargoes in six of the 10 months this year, with a brief boost to eight in April and made no change for July and August, while the total reduction coming up to 21 parcels, based on OPIS record.

Gain greater transparency into Asia-Pacific markets for more strategic buy and sell decisions on refinery feedstocks, LPG and gasoline with the OPIS Asia Naphtha & LPG Report.

A string of very larger crude carriers (VLCCs) were snapped up in the past week as traders took the opportunity of tumbling freight to replace costly time charters (TCs) made earlier at the cusp of the super contango with bookings done at up to one-fifth the price six months ago, according to ship brokers, trading sources and fixtures.

The slew of charters raised expectations of a new round of a buy-now, sell-later trading strategy, or more commonly known as a contango or storage play, but traders said the forward price curve do not yet support such a move.

According to shipping reports obtained by OPIS, 24 VLCCs have been booked on mostly three-six month TCs with one trading company having got the jump on others and managing to snap up at least four supertankers at below $30,000 per day with the cheapest at $25,000/day. The best deal on the list was for a 3+3-month booking delivered Singapore at $20,500/day, the list showed.

Included in the list are three newly-built VLCCs, the Hunter Idun, CSSC Liao Ning and the Babylon, which were laden with middle distillates in their maiden voyage and may continue to carry clean products throughout the TC period due to ample diesel and jet fuel supplies and a better contango structure, trading sources said.

"Marketing adjusted EBIT of $2 billion (H1 2019, $1 billion) reflected oil, in particular, benefiting from the volatile and structurally supportive marketing environment," Glencore said in its first-half results, adding that this allowed the company to raise full-year guidance to the top end of its long-term $2.2-$3.2 billion range.

The market condition refers to the super contango that developed after OPEC and Russia failed to agree on an output reduction agreement, leading to Middle East producers opening their oil taps and slashing prices, which coincided with the COVID-19 demand decimation to send prices tumbling at vast discounts for prompt cargoes versus forward barrels.

A similar picture emerges on the forwards, which while in contango is about one-third of that chalked in the last super cycle with the six-month spread at -$3.10/bbl for Brent, -$2.50/bbl for Dubai and -$2.80/bbl for WTI, sources said.

However, the latest increase in output from the OPEC+ group and continued lackluster demand due to a resurgence of COVID-19 cases amid fresh lockdown measures have raised the specter of another super contango, the trading sources said.

Gain greater transparency into Asia-Pacific markets for more strategic buy and sell decisions on refinery feedstocks, LPG and gasoline with the OPIS Asia Naphtha & LPG Report.

Forecasts for the bigger cuts still held on Tuesday following unexpected news of a 30% cut by Abu Dhabi National Oil Co. in its October term loadings across all four grades in compliance with its OPEC+ obligations, according to a notice to buyers. The promise of a supply reduction temporarily boosted spot prices but it failed to change the price structure, Dubai crude remains entrenched in contango,

Naphtha usage as petrochemical feedstock was crimped by poor aromatics margins as downstream polyester and other derivative demand started to slow down in the face of the prolonged economic downturn wreaked by COVID-19. However, consumption in China for use in olefin production remains robust, a source said.

“Saudi is producing about 300,000 b/d less than their quota in August, they should have raised it by 500,000 b/d but there is a shortfall. So it also depend if Aramco wishes to use up all this slack by pumping out more in October,” another trading source said.

“For the rest of the year we do not expect so much crude imports, fresh arrivals have already started to decline. The storage economics have worsened and there are high demurrage costs,” said Sophie Fenglei Shi, downstream research associate director at IHS Markit in Beijing. OPIS is an IHS Markit company.

Demand in India will increase as two massive crude units, the Indian Oil Corp. 300,000 b/d Paradip refinery and a 380,000 b/d unit at the mega Reliance Industries Jamnagar site begin operations after around a three-week maintenance.

Gain greater transparency into Asia-Pacific markets for more strategic buy and sell decisions on refinery feedstocks, LPG and gasoline with the OPIS Asia Naphtha & LPG Report.

Chinese refiners faced excess domestic supply of transportation fuels after the economy was again disrupted by COVID-19 outbreaks in July, coupled with heavy monsoon floods in various parts of China.

Chinese refiners went on an extensive bargain hunt in spring when ICE Brent crude prices sank to as low as under $20/bbl, which ended up in record shipments in the summer that is now extended to autumn, trading sources said.

Sinopec restarted its 460,000 b/d Zhenhai Refining & Chemical Co. site in July after a four-month maintenance and its 250,000 b/d Tianjin facility after a two-month turnaround, leading to the higher output.

Naphtha buyers including Yeochon NCC (YNCC) and LG Chem paid higher premiums for their 2021 CFR term purchases than this year as the startup of a wave of new crackers in the coming months and next year shaped views of a tighter supply outlook, market participants said.

Asia naphtha demand as a petrochemical feedstock will continue to grow as new crackers begin operations even as below-capacity refinery utilization rates in some countries squeeze supply further, they said.

In addition, Lotte Chemical plans to restart its fire-hit Daesan cracker by end 2020, the company said earlier this month, adding it plans to diversify feedstocks and will more than double its use of liquefied petroleum gas (LPG) in three years.

The concluded 2021 prices, at mid-to-high single digits, also surprised to the upside because they were higher than paper values, two market sources said.

Refinery run rates in Asia and the Middle East are expected to improve to 74% this month and reach 82% by January 2021, from below 70% in April during the depth of coronavirus disease 2019 (COVID-19) lockdowns, said April Tan, IHS Markit associate director in Singapore.

Gain greater transparency into Asia-Pacific markets for more strategic buy and sell decisions on refinery feedstocks, LPG and gasoline with theOPIS Asia Naphtha & LPG Report.

A Royal Dutch Shell refinery in the Philippines became the first Asian casualty of the fuel demand destroying coronavirus disease 2019 (COVID-19) pandemic as other sites in the region brace themselves for similar fallouts in the face of new virus outbreaks and poor refining margins while more sites come onstream in China.

Pilipinas Shell Petroleum Corp said on Thursday that its near 60-year-old 110,000 b/d Tabangao refinery in Batangas province was no longer economically viable and would be turned into an import terminal.

“Due to the impact of the COVID-19 pandemic on the global, regional and local economies, and the oil supply-demand imbalance