China's 2020 refinery output rises 3% to record; gas output up nearly 10%

China’s refineries posted record throughput in 2020, processing 3% more crude oil than a year ago, as they took advantage of low prices and healthy margins on a quick rebound in domestic fuel demand from the coronavirus pandemic.

Annual throughput stood at 674.41 milion tons in 2020, or about 13.45 million barrels per day, up roughly 410,000 bpd from 2019, data from the National Bureau of Statistics showed.

December output rose 2.1% on the year to a monthly record at 60 million tons, or about 14.13 million bpd, a touch below the daily record set in November, which has one less day, at 14.2 million bpd.

“China’s manufacturing sector strength climbed to levels not seen in years,” said Seng Yick Tee, a senior director at SIA Energy.

“The economic acceleration boosted by investments, merchandise exports and domestic consumption all contributed to record crude runs in December and the whole of 2020.”

Refineries slashed operations from February through April amid widespread lockdowns nationwide to rein in the virus, but operations rebounded from May, after China largely contained it. Plants raised operation to peak rates through the rest of 2020.

The rebound was also bolstered by expanded capacities at state-run refiners and full operations at large private refiners Hengli Petrochemical and Zhejiang Petrochemical Corp.

Zhejiang started its third 200,000 bpd crude unit in November, becoming China’s single-largest oil processor.

Independent plants in the eastern province of Shandong that account for nearly a fifth of national capacity have raised throughput since April, operating at their highest levels since they first became importers of crude in 2016, says Sublime China Information.

While a decline in vehicle sales dragged on gasoline demand, the booming trucking business and construction gave diesel an unexpected boost.

China’s crude oil production gained 1.6% last year to 194.92 million tons, equivalent to 3.89 million bpd, the data showed.

Although marginal, this figure represents a hard-won increase as companies scaled back capital spending amid lower oil prices and as reserves at top onshore producing fields such as Daqing and Shengli were quickly depleted.

Offshore oil and gas giant CNOOC Ltd accounted for most of the increase, pumping about an extra 2.4 million tons, a top executive of China National Offshore Oil Company said in January.

Natural gas output rose 13.7% in December from a year ago to a record high of 18.7 billion cubic meters, to meet surging heating demand as cold spells grip large areas of the country.

Total 2020 output was 188.8 bcm, up 9.8% from 2019, in one of the swiftest annual expansions since 2014, as companies prioritised gas drilling in Beijing’s long-term drive to boost use of a fuel that emits half the carbon dioxide of coal. (1 tonne = 7.3 barrels for crude conversion)

Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; Editing by Michael Perry and Clarence Fernandez

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