PETROCHINA Co., China’s second-largest State-run refiner, aims to start operating a new refinery in the country’s southwest in October after several delays, boosting the nation’s already-surging crude imports.

    The 260,000-barrel-per-day Anning plant in Yunnan Province would be the first major Chinese refinery to come online in nearly two years, amid a scaleback by State energy firms in adding refining capacity as lower oil prices slashed earnings.

    Saudi oil firm Aramco is looking to invest US$1-1.5 billion in the refinery as well as the retail assets of PetroChina, sources said last year.

    “The latest schedule for the Yunnan refinery start-up is October,” said a PetroChina spokesperson, without elaborating. The refinery has been delayed several times as tightening environmental regulations forced PetroChina to resubmit approvals for changes to plant configurations.

    Crude imports into China, the world’s second-largest buyer, soared by 16 percent, or more than 1 million barrels per day, in the first five months of 2016 from the same period last year, the fastest growth in more than a decade.

    That demand, which has helped push oil prices back near US$50 a barrel, has been driven by Chinese oil firms building stockpiles and fresh appetite from a new group of importers, the independent plants allowed to import crude for first time since late last year.

    A PetroChina official with knowledge of the firm’s oil trade said that if a deal was finalized with Aramaco, the Saudis would supply at least part of the refinery’s crude oil requirements.

    Saudi Arabia has for three straight months lost to Russia the spot as the top crude supplier to China.

    The plant is designed to process high sulfur crude oil that will be shipped in tankers and then pumped through a pipeline connecting the southwest coast of neighboring Myanmar and Yunnan, said the industry sources. The last target for the start of operations was the middle of this year.

    PetroChina parent CNPC early this year started trial operations of the 440,000-barrel-per-day pipeline that runs parallel to an operating natural gas pipeline, but has to wait for the full completion of the refinery for commercial start-up. (SD-Agencies)