China registers back-to-back 2nd month growth in refinery output

• China’s crude oil throughput increased by 0.8% in October.
• Refiners increased processing to export more refined fuel.
• Natural gas output jumped 12.3% from October to 18.5 billion cubic metres in November.

China’s crude oil throughput increased by 0.8% in October compared to the same month a year earlier, according to data released on Tuesday, as refiners increased processing to export more refined fuel and a greenfield plant began testing.

According to the National Bureau of Statistics (NBS), October refinery output was 58.62 million tonnes, or 13.8 million barrels per day (bpd), marginally below September’s 13.82 million bpd.

Throughput in the first ten months of 2022 was 555.88 million tonnes, or around 13.35 million bpd, a level that remained 4.5% below the level of the previous year as a result of eight months of year-on-year output declines between January and August.

As a result of the government’s additional release of a large number of export quotas, October exports of refined fuel increased by 13% on an annual basis to 4.46 million tonnes, the third-highest monthly rate of the year.

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Late in October, PetroChina Guangdong Petrochemical began test production at one of its 200,000 bpd oil plants.

Moreover, the boost in fuel exports, which is expected to increase further in November, prompted the country’s independent refineries to maintain processing rates between 65 and 70 percent, according to estimates by Chinese consultancy JLC.

Natural gas output jumped 12.3% from October 2021 to 18.5 billion cubic metres in November, the highest monthly rate since March, as national producers stepped up drilling in preparation for the winter heating season in northern China.

January-October output increased by 6% over the same period in 2021.

China plans to raise domestic output, fill gas storage facilities, and increase imports of less expensive pipeline gas from Russia and Central Asia in order to ensure winter supplies amid a red-hot global spot gas market.

In the meantime, crude oil production stayed firmly above 4 million bpd, a level seen by the state-dominated sector as crucial for ensuring domestic supply security as businesses accelerated the development of increasingly difficult reservoirs.

October production increased 2.5% from the same month a year ago to 17.22 million tonnes, or 4.06 million barrels per day. Year-to-date production increased by 3 percent to 170.98 million tonnes, or 4.1 million barrels per day.

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