ANALYSIS-China set for 400,000-bpd oil refinery output rise

By Chen Aizhu and Jim Bai

BEIJING, Jan 9 (Reuters) - China's top oil refineries and major new plants will supply an additional 400,000 barrels per day (bpd) of fuel to the world's second-biggest consumer this year, more than double last year's rise, a Reuters survey found.

While that growth is nearly equal to the forecast increase in demand, China may be forced to continue importing extra supplies right up until the Olympics this summer as several key facilities will be commissioned only in the latter half of the year.

China has taken a measured approach to expanding its refining sector, pushing its big state oil firms such as Sinopec (0386.HK) to build enough new plants to meet fast-growing domestic demand while cautioning against excessive expansion -- in contrast to the surge in export-oriented investment in India and the Gulf.

The risks of that policy showed last autumn, when regional fuel shortages spread as far as the capital city, causing China's worst supply crisis in four years as the dozens of semi-official "teapot" refineries shut down due to soaring feedstock costs.

The new refineries due on stream this year -- including the first major project by offshore oil producer CNOOC (0883.HK), as well as a venture with Exxon Mobil Corp (XOM.N) and Saudi Aramco -- are the result of projects planned in the wake of China's demand spurt in 2004, when global oil markets awoke to its influence.

Another 16 plants, making up about half of the country's total refining capacity, will process an additional 220,000 bpd of crude this year, with increases mostly from newly revamped plants in Beijing and Shanghai, the survey of industry officials and company sources showed.

For a Table on 2008 refinery runs click on: [ID:nSP87132]

For spot news on Chinese refinery operations: [O/CNREFINE]