December 14, 2018 / 3:38 AM / 6 months ago

REFILE-UPDATE 1-China's refinery runs ease from peak, gas output at record high

(Refiles to clarify in 4th paragraph timing of prices being lowered; also adds tag to indicate this is UPDATE 1)

* Refiners scaled back output as prices fall

* Natural gas output at record as heating season starts

* China expected to consume 270 bcm of gas in 2018

By Meng Meng and Chen Aizhu

BEIJING/SINGAPORE, Dec 14 (Reuters) - China’s November refinery production eased off highs touched in the previous two months, official data showed on Friday, as plants scaled back runs amid swelling oil product inventories and slowing sales.

Refineries processed 50.46 million tonnes of crude oil last month, or 12.28 million barrels per day, up 2.9 percent from the same month last year, but down from a record of 12.49 million bpd in September, data from the National Bureau of Statistics showed.

For the first 11 months, refinery output gained 7.2 percent to 554.48 million tonnes, or 12.12 million bpd, on track for an annual record.

Domestic sales of gasoline and diesel slowed sharply from around mid-October, prompting the government to lower prices for gasoline and diesel in November amid a steep drop in global crude oil prices.

“China’s state planner lowered gasoline and diesel prices three times in November. Both teapots and state refiners were under pressure to sell products to meet their annual sales target,” Han Cong, products analyst with consultancy JLC.

She added that private refiners’ utilisation rate fell to 63.22 percent in the first week of December from 65.71 percent at the start of November.

Meanwhile, China’s November natural gas production rose 10 percent to a record high of 14.3 billion cubic meters (bcm), data showed, to cope with growing demand as heating season starts from mid-November.

China has ramped up both domestic production and imports to meeting rising demand from households as the government switched anther 3 million households to gas heating this winter.

In the first 11 months, gas output was up 6.6 percent from a year ago to 143.8 bcm.

China is expected to consume 270 bcm of gas this year, the chairwoman of Beijing Gas, the dominant gas distributor in the Chinese capital, said on Thursday. That represents an increase of 12.5 percent, in line with an earlier estimate by consultancy SIA Energy.

Reporting by Chen Aizhu and Meng Meng; Editing by Sam Holmes

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