BEIJING, July 23 (Reuters) - The long-mooted plans by Sinopec Corp (0386.HK)’s Maoming refinery to nearly double crude processing capacity may come only after 2010, a senior industry official said on Wednesday.
Facing nearly a full year of refining losses under record crude and state-set fuel price caps, top Asian refiner Sinopec Corp is likely to proceed with more caution in adding new refining capacity, said the Beijing-based Sinopec advisor.
The 270,000 barrel-per-day Maoming refinery, the country’s second-largest by output, plans to add in 2009 a new crude distillation unit of 240,000 bpd and other secondary units.
The refinery said in an email statement that the expansion won the full support of the provincial government of Guangdong, China’s manufacturing hub and the largest oil consumer by province.
But the expansion, estimated by one Maoming refinery official to cost some 4 billion yuan ($588 million), has not yet won Sinopec’s approval, said the Sinopec advisor familiar with the state refiner’s expansion plans.
“The Guangdong region is short of fuel, but given the company’s tight cash flows this year, the expansion is unlikely to go ahead on the schedule the plant wishes,” said the advisor, who declined to be named.
Sinopec warned investors last week that its first-half earnings could fall by more than half under soaring crude and state-capped fuel rates.
Under Maoming’s expansion proposals, the plant, in Maoming city in western Guangdong, also plans to add a 48,000-bpd hydrocracker, a 36,000-bpd hydrotreating unit and a 400,000 tonne-per-year aromatics facility, the refinery said.
It badly needs a new hydrocracker, a unit that strips sulphur and yields high-quality fuel, said the Maoming plant official, after its only hydrocracker — an aging 16,000-bpd facility— suffered damages in a blast in April.
Reporting by Chen Aizhu; editing by Jonathan Hopfner