General Status of the Oil Processing Industry
                    Chai Guoliang
China has more than 90 oil refineries today  with  a  crude
oil processing capacity of around 238.70  million  t/a  at
the end of 1996, holding the third place in the world.  Of
the total, 42 oil refineries have a capacity of over 2. 50
million  t/a,   33  of  them  belonging  to  former  China
Petrochemical Corporation, accounting for 78.57%. Table  1
shows the detail.
The crude oil processing amount in China was around 142. 26
million tons in 1996, the average operating rate was 59.60%,
more than 20  percentage  points  lower  than  the  normal
operating rate (over 80%), and around 40% of the  capacity
was idle. The crude  oil  processing  amount  was  159. 50
million tons in 1997.
The  crude  oil  processing  capacity   in   former   China
Petrochemical Corporation system was 167.30  million  t/a,
accounting for 70.09% of the national total; The crude oil
  processed  amount  was  118. 08  million  tons  in  1996,
accounting for 83% of the national total;   The  operating
rate was 70.58%, 10.98 percentage points higher  than  the
national average operating rate but still 9.42  percentage
points lower than the normal operating rate. The crude oil
processing capacity in the 11 oil refineries  in  Liaoning
is 45.70 million t/a, accounting for 19.15% of the  total;
The crude oil processed amount was around  29. 00  million
tons in 1996, accounting for 20.39% of the national total;
The operating rate was 63.46%,   3. 86  percentage  points
higher than the national average operating rate but 16.54%
percentage points lower than the normal operating rate.
There are following problems in oil refineries in China:
1. Production units fail to reach the economic scale.
Most of oil  refineries  in  China  have  the  problems  of
numerous refining units, small single unit capacity,  high
energy consumption and poor  adaptability  to  intensified
operations. For example, Fushun No. 1 Petroleum Plant  was
established in 1928, the  crude  oil  processing  capacity
today is only 3  million  t/a  but  there  are  nearly  10
  refining  units.   Fushun  No.   2  Petroleum  Plant  was
established in 1939, the  crude  oil  processing  capacity
today is 5 million t/a but there are more than 10 refining
units. Oil Refinery of  Dalian  Petrochemical  Corporation
was established in 1933, the crude oil processing capacity
today is 7.10 million t/a  but  there  are  more  than  20
refining units. The crude oil processing capacity  of  Oil
Refinery of Gaoqiao  Petrochemical  Corporation  is  7. 50
million t/a but  there  are  25  refining  units  and  the
biggest single unit capacity is 3 million t/a. Atmospheric
topping units, diesel hydrogenation  units  and  reforming
units all have small capacity and high energy consumption.
These problems, plus the high overhead expenses, have  led
  to  high  production  cost  and  poor   adaptability   to
intensified and market-oriented operations.
2. Oil refining units have irrational  structure  and  poor
adaptability to processing import crude oil.
Most of oil refining units in China  are  designed  on  the
basis  of  domestic  crude  oil,   and  can  hardly  adapt
themselves to the great changes in  crude  oil  varieties.
Especially the state adopts a policy that  oil  refineries
in inland areas should be  based  on  processing  domestic
crude oil and oil refineries in  river- side  and  coastal
areas should be based on processing import crude oil. Most
of oil refining units can not  meet  the  requirements  in
processing import crude oil. Refining of sulfur-containing
crude oil is done only by blending. The increase of  crude
oil processing amount is therefore restricted.
3. The quality of refined products  is  not  high  and  the
output of chemical raw materials is low.
The amount  of  chemical  raw  materials  provided  by  oil
refineries only accounts for 8 - 10% of the total  refined
products. Great quantities of chemical raw  materials  are
burnt as fuel and huge potential  chemical  resources  are
wasted. Oil refineries  lack  product  refining  capacity.
Diesel from processing of sulfur-containing crude oil,  in
particular, has to be refined before it is  taken  out  of
the plant. The quality of some gasoline taken out  of  the
plant is not high either.
4. The extended processing of products  is  not  sufficient
and the added value is low.
Most of chemical raw materials such as dry gas and  LPG  in
oil refineries are burnt as fuel, and their added value is
low.
5. The distribution of oil refineries is not even.
There are 16 oil refineries with a capacity of  over  2. 50
million t/a in Northeast China, accounting for 38. 10%  of
the national total oil refineries with a capacity of over 2.
50 million t/a. The total capacity of these oil  refineries
is 69.20 million  t/a,   accounting  for  28. 15%  of  the
national total. They are mostly concentrated in  Liaoning.
There is, however, not a single large oil refinery in Tibet,
Guizhou, Guangxi, Yunnan, Shaanxi,   Shanxi  and  Sichuan.
Table 1 shows the detail.
  According to statistics, during the Ninth Five-year  Plan
  period  more  than  124. 00  million  t/a  of  crude  oil
processing capacity will  be &