THE fallout from COVID-19 is hastening the accelerating consolidation of the refinery industry across Asia.

A frenzy of refinery building in China is set to make the nation the world’s largest crude processor this year. At the same time, a drive to de-carbonize Asia’s biggest economy means demand for fuels like diesel and gasoline will decline, potentially leading to more exports from the new facilities.

That’s putting pressure on the traditionally more export-focused plants in South Korea and Singapore that are trying to cope with depressed demand due to the pandemic and the longer-term transition away from fossil fuels. Refineries in places like Australia and the Philippines that lack the size and sophistication to make them competitive are closing altogether.

China’s refining capacity has nearly tripled since the turn of the millennium and the International Energy Agency forecasts it will overtake the United States this year.

Crude processing will climb to 1 billion tons a year, or 20 million barrels per day, by 2025 from 17.5 million barrels at the end of 2020, according to China National Petroleum Corp.’s (CNPC) Economics & Technology Research Institute.

Sinopec started operations at its 10-million-ton a year Zhongke plant last June. That was followed in November by the first phase of private processor Zhejiang Petrochemical and Chemical Co.’s enormous Zhoushan facility near Ningbo, which has a capacity of 20 million tons that’s set to double when the final stage is finished.

Another 36 million tons of capacity will be added late this year when CNPC and Shenghong Group open plants.

(SD-Agencies)