PetroChina plans to shutdown its refinery at Lanzhou in May, investing to improve fuel quality and expand petrochemical capacity. The shutdown will cut output by up to 500,000 tons. An expansion completed last year brought refining capacity to 10 mln tpa, equivalent to around 200,000 bpd and ethylene capacity to 700,000 tpa.
Current high oil prices are causing refining losses of around 1 billion yuan a month, because of a wide gap between rising crude prices and state-set refined product prices.The refinery has been suffering losses for years, because parent company China National Petroleum Corporation is a state-owned enterprise, hence company bottom line is not a priority. Being more profitable, the petrochemical business has offset some of the losses