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Petrochemical stimulus plan to focus on refining and chemicals

(Xinhua)
Updated: 2009-02-18 11:07

China's upcoming stimulus package for the petrochemical sector will likely focus on oil refining and chemical industries, while oil and gas exploration will not be touched upon, petrochemical experts said Tuesday.

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The package will more likely dedicate to the overall development of the sector in the next three years with emphasis on industrial restructuring and optimization of product mix, said sources with China Petroleum and Chemical Industry Association (CPCIA), who declined to be named.

In terms of chemical industry, the stimulus package would stress adjustment and upgrading of industrial structure, support development of high-end chemical products, and encourage manufacturers to make high-tech and high-value-added products which could replace import ones, said the sources.

China's petrochemical industry has seen unbalanced development, according CPCIA report, citing facts such as the primary chemical manufacturing saw serious excess capacity, while high-end chemical production was relatively weak and relied largely on imports.

China's refining industry might extend its existing projects and build new ones, since China's current refining capacity might not be able to meet the demand of the country's development in the long term, said Dong Xiucheng, professor with China University of Petroleum.

The package might also include plans for establishing a reserve system for petrochemical products, such as fertilizer reserve during agricultural off-peak seasons and commercial reserves of refined oil, said sources with CPCIA.

China's petrochemical sector saw profit drop by 10 percent last year, totaling 499 billion yuan ($73.06 billion), said the CPCIA report.

China's refining capacity reached 342 million tons last year, and will increase 40 million tons in 2009, according to the Economic and Development Research Institute under China Petroleum and Chemical Corporation (Sinopec), China's largest oil refiner.