PetroChina's Dalian Refinery Downsizing: Impact and Future Plans
PetroChina's Strategic Closures in Dalian
PetroChina, a major player in the oil sector, plans to shut down its largest refinery in northern China's Dalian by mid-2025. The complete closure of the Dalian Petrochemical plant, with a capacity of 410,000 barrels per day (bpd), signifies a notable shift amid declining fuel demand and economic growth challenges.
Overcapacity and Economic Context
Chinese refiners, facing overcapacity and a downturn in fuel consumption driven by a shift towards electrification, are reevaluating operational strategies. PetroChina has already reduced its throughput by 210,000 bpd at the Dalian facility, a response to the current market's harsh realities.
Future Developments at Changxing Island
The authorities in Dalian have outlined plans to replace the aging refinery with a new site on Changxing Island. Under a framework agreed in November 2022, a new 70-billion yuan refinery and chemical complex is set to be developed, which will feature a more compact 200,000 bpd crude refinery and an ethylene production unit.
However, this project remains at the pre-feasibility stage, and PetroChina has yet to finalize investment decisions. The planned shutdown of Dalian’s existing facilities follows serious safety incidents, including a major oil spill, an explosion, and a fire.
Industry Reactions
A senior executive noted that the closure timeline is being adhered to, reflecting an overarching strategy to align with contemporary market demands.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.