Global refining capacity is expected to increase by nearly three million barrels per day (bpd) by the end of next year when at least nine refinery projects are expected to start up in the Middle East and Asia.

In the International Energy Agency’s (IEA) June 2022 Oil Market Report, the IEA expects net global refining capacity to expand by one million bpd in 2022 and by an additional 1.6 million bpd in 2023.

Net capacity additions reflect total new capacity minus capacity that has closed.

The IEA said the scheduled expansions follow a period of reduced global refining capacity.

The agency said net global capacity declined in 2021 for the first time in 30 years.

It said new refinery projects would increase production of refined products, such as gasoline and diesel, and in turn, they might reduce the current high prices for these products.

The IEA said China’s refinery capacity is scheduled to increase significantly this year.

It said the Shenghong Petrochemical facility in Lianyungang has an estimated capacity of 320,000 bpd, and it was reported that trial crude oil-processing operations began in May 2022.

It said that in addition, PetroChina’s 400,000 bpd Jieyang refinery is expected to come online in the third quarter of 2022. A planned 400,000 bpd Phase II capacity expansion also began operations earlier this year at Zhejiang Petrochemical Corporation’s (ZPC) Rongsheng facility.

Outside of China, the 300,000 bpd Malaysian Pengerang refinery restarted in May 2022 after a fire forced the refinery to shut down in March 2020.

In India, the Visakha Refinery is undergoing a major expansion, scheduled to add 135,000 bpd by 2023.

The IEA said new projects in the Middle East are also likely to be an important source of new refining capacity.

The 400,000 bpd Jizan refinery in Saudi Arabia reportedly came online in late 2021 and began exporting petroleum products earlier this year.

More recently, the 615,000 bpd Al Zour refinery in Kuwait — the largest in the country when it becomes fully operational — began initial operations earlier this year.

A new 140,000 bpd refinery is scheduled to come online in Karbala, Iraq, this September, targeting fully operational status by 2023. A new 230,000 bpd refinery is set to come online in Duqm, Oman, likely in early 2023.
Source: The Edge Markets