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Sinopec merges two refineries in Guangdong

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Reuters is reporting that Sinopec Corp. has merged two subsidiary refineries in Guangdong as the state refining giant looks to improve operations in the face of rising competition in South China.

The company in July combined the newly launched Zhongke refinery complex and a neighbouring old plant Dongxing Petrochemical, both based in the coastal city of Zhanjiang, and named the merged entity Zhongke Refining and Chemical Co.

Guangdong province is China’s top oil-consuming region. Sinopec alone operates nearly 1 million bpd of refining capacity in the province and rival PetroChina is building a new 400 000 bpd refinery.

The new entity has a crude refining capacity of 300 000 bpd and is due to start a new 800 000 tpy ethylene complex in September at the Zhongke plant.

The older Dongxing plant, which operates a 100 000 bpd crude unit, has since 2017 become China’s leading processor of US crude oil, mostly of low sulfur quality that fits the plant’s configuration, said a second official.

Between 2017 and 2019, Dongxing processed about 15 million bbl of West Texas Intermediate crude, replacing some of its previous regular imports from West Africa.

After a lull in US oil imports in 2019 due to souring relations with Washington, China since earlier this year has resumed US oil purchases following the Phase 1 trade deal agreed in January.

WTI crude typically gives a high yield of naphtha, a feedstock needed for the start-up of the Zhongke ethylene plant.

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