China may refine 50% more crude in 5 years
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| A Sinopec employee inspects equipment in Qingjiang, Jiangsu province. Oil refining capacity of foreign companies in China will rise to 31.5 million tons per year by 2015. [China Daily] |
![A Sinopec employee inspects equipment in Qingjiang, Jiangsu province. Oil refining capacity of foreign companies in China will rise to 31.5 million tons per year by 2015. [China Daily]](http://images.china.cn/attachement/jpg/site1007/20100526/001fd04cea510d66d52a09.jpg "A Sinopec employee inspects equipment in Qingjiang, Jiangsu province. Oil refining capacity of foreign companies in China will rise to 31.5 million tons per year by 2015. [China Daily]")
China's oil-refining capacity is expected to jump by 50 percent in the next five years to 750 million tons of crude oil but overcapacity concerns should not be an issue considering the potential domestic demand, industry analysts said.
China will be able to refine 500 million tons of crude oil by the end of this year, a rise of 6.4 percent from a year earlier. The capacity is likely to increase between 6 percent and 7 percent annually over the next five years if refineries under construction or being planned are completed on schedule, said a report on Sinopec's Website.
Although it is reasonable to worry about a possible overheating in refining investment, there is still much room for the oil demand to rise as China is set to develop rapidly and the booming auto industry will also create increasing need for oil, the report said.
Sinopec's report also noted that the country should control the pace of rising production to avoid excessive competition within the industry and supply surplus in the short term. It also encouraged the phasing out of outdated capacity.
In addition to the risk of overcapacity, domestic oil refiners will face challenges from over-reliance on imported oil, higher costs and competition from developed countries and resources countries.
As much as 70 percent of the country's crude oil will have to be imported from overseas in the next 10 years, and this will become the major bottleneck to the development of the industry.
In 2009, China imported 189 billion tons crude oil, or 51.3 percent of its crude oil supply, and surpassed the 50 percent international alarm level.
The Sino-foreign joint ventures are expected to refine 31.5 million tons annually by 2015, up from 10.5 million tons now and accounting for 4.2 percent of the China's total refining capacity, the report said.
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