* To boost refining capacity by 56 pct by mid-2014
* Fuel output to nearly double
* May submit environment assessment of new ethylene unit by
By Judy Hua and Chen Aizhu
BEIJING, Nov 13 Asia's largest refiner, China's
Sinopec, will boost refining capacity at its Yangzi
Petrochemical unit by more than half to 250,000 barrels per day
(bpd) in mid-2014, and may submit its ethylene expansion plan to
environment officials by the end of the year, the head of the
The company is expected to finish building a 160,000-bpd
crude processing unit by the end of 2013 and put it on stream in
mid-2014, Ma Qiulin, chairman and president of Sinopec Yangzi
Petrochemical Co Ltd, told Reuters on the sidelines of the
Communist Party Congress.
But total refining capacity will only rise to about 250,000
bpd, from 160,000 bpd now, because an old 70,000-bpd crude unit
will be shut down, Ma said.
Yangzi, located in the eastern province of Jiangsu on the
bank of the Yangtze river, is also building a new 2-million
tonne-per-year (tpy) catalytic cracking (FCC) unit, and plans to
eliminate an old 800,000-tpy FCC unit, he said.
"We will be using cutting-edge technology in the new round
of expansion and will eliminate outdated units to raise our
competitiveness," Ma said.
The company will be able to produce between 6.5 million and
6.6 million tonnes of oil products, including gasoline, kerosene
and diesel, after the expansion, nearly double the 3.5 million
tonnes now, he said.
About three-fourths of the crude processed in Yangzi is
imported and it wants to retain this level after the expansion.
Yangzi is expected to process 160,000 bpd of crude in 2013,
up 23 percent from 130,000 bpd this year, he added.
One of Sinopec's largest makers of polyester and plastics,
Yangzi faces tougher environmental challenges in its expansion,
as the industry runs into tighter scrutiny, especially after
recent protests turned violent.
The firm wants to double ethylene capacity by adding a new
800,000 tonne-per-year complex and hopes to submit its
environmental report by the end of this year.
"The challenge is (the government) requirement of keeping
the same level of pollution while we boost capacity," Ma said.
China has promised to give regulators more teeth as it tries
to head off growing public anger over big industrial polluters,
many of which are state-owned.
Last month, the eastern city of Ningbo cancelled plans to
expand a petrochemical complex after a week of sometimes violent
protests sparked by concerns over their environmental impact.
Protesters objected to the building of a paraxylene facility
at the plant, owned by a Sinopec subsidiary, on the grounds that
paraxylene, used to make polyester, was a carcinogen.
Ma, who has worked at Yangzi for three decades, said the
public had a "misunderstanding" of paraxylene, which has lower
toxicity than gasoline.
"I'm not very concerned. I don't think it's a problem for
China, which has 30 years of experience ... in building
petrochemical plants," said Ma.
Yangzi invested more than 900 million yuan ($144 million) on
26 pieces of equipment to cut pollution between 2006 and 2010
and will invest at least 1.1 billion yuan from 2011 to 2015.
Besides its traditional oil refining and petrochemical
businesses, Yangzi has started new ones, such as the development
of biochemical products and coal and natural gas-based chemical
"Crude oil costs remain high," Ma said. "We are shifting our
strategy to have cheaper and more reliable resources."
Yangzi's chemical business could be profitable this year and
Ma expects the chemical market to be stable next year.
($1=6.229 Chinese yuan)
(Editing by Clarence Fernandez)