By the end of 2006, China’s primary crude oil processing capacity reached 350 million tons (approximately 2.6 billion barrels per year), which ranked second in the world after the United States, according to a report by Industrial Info Resources (www.industrialinfo.com). In 2006, China’s actual crude oil production reached 307 million tons (2.3 billion barrels per year), with the combined output of four major refined products (gasoline, diesel, kerosene, and aviation oil), reaching 188 million tons.

The infancy stage of China”s oil refining industry is considered the period from 1863 to 1963. Kerosene was first imported to China in 1863. It took a century for the country to become self-sufficient. The second stage is from 1960s to 1990s. During this period, Industrial Info says China entered into the ranks of the major oil refining countries in the world, with a huge leap both in production capacity and technology. From the beginning of the new century, China’s oil refining has entered into a new stage, which Industrial Info says is to realize the jump from a large oil refining country to a strong oil refining country by 2020.

Currently, China’s oil refining industry is hampered with high energy consumption and low light oil recovery rates. The capacity and processing scale of facilities is still not large enough and product structure is not efficient. To realize the jump from a large oil refining country to a strong oil refining country, there are many obstacles that need to be overcome, according to Industrial Info. Uneven distribution of refining capacity is one of the most obvious problems. Crude oil refineries are concentrated in East and Northeast China, with fewer in Northwest, Central South, and North China. Due to the lack of crude oil resources, the southwest region is the only region without a large oil refinery. The production and consumption of refined products is also imbalanced regionally.

Industrial Info says planned expansion of oil refining capabilities in China is expected to increase capacity by about 100 million tons by 2010-2012. New facilities will be mainly located in East China, South China, and Southwest regions. Several large refining bases of 10 million ton levels at Huizhou, Qingdao, and Qingzhou will be built as part of the Eleventh National Five-Year-Plan period.