CNOOC to cap refining capacity at 50 million tonnes/yr amid supply glut

BEIJING, July 14 (Reuters) – China National Offshore Oil Company, or CNOOC, said it seeks to reign in total refining capacity and step up building gas stations in the next five years, citing concerns about a supply glut and margin pressures in the petrochemical industry.

The oil giant said it will cap crude runs capacity at 50 million tonnes per year, or 1 million barrel per day by 2020. In addition, the company will expand its gas station fleet to 2,000 by 2020 in a bid to promote fuel sales, according to a statement published late Wednesday on the company’s website.

Refiners in the world’s second largest economy have flooded the market with oil products, with diesel and gasoline exports soaring in recent months.

CNOOC, whose main refining asset is the 240,000 bpd Huizhou refinery, said aromatic products will be the new growth point for its refining business. CNOOC just completed a $2 billion upgrade of a smaller plant that is expected to produce 1.5 million tones of aromatics.

The company will be “cautious and moderate” in expanding fuels used for passenger cars, it said in the statement.

(Reporting by Meng Meng and Aizhu Chen; Editing by Michael Perry)