General Status and Future Prospect
               of the Oil Refining Industry
Liu Quangen/Chief of the Oil  Refining  Division  of  China
Petrochemical Consulting Co., Ltd.
1. General status
With the prospecting and development of  Daqing  Oilfield,
Shenli Oilfield and Liaohe Oilfield in the 60's,  the  oil
refining industry in China has made a  rapid  development.
Since 1978 in particular, the state has adopted  a  policy
of reform and opening up, technologies such as  continuous
  catalytic  reforming,   hydrocracking,   residual   hydro
- desulfurization,   heavy  oil  catalytic   cracking   and
alkylation have  been  developed  or  imported,   and  the
technical level of the oil refining industry in China  has
therefore reached or approached the advanced world  level.
The average annual growth rate of the crude oil processing
capacity and processing amount in the recent 11 years is 6
.31% and 4.67%  respectively.   The  crude  oil  processing
capacity reached 205. 55 million t/a  and  the  crude  oil
processing amount reached 135 million tons in  1995.   The
output of gasoline, kerosene, diesel and lube oil in  1995
was 71.376 million tons with an average annual growth rate
of 5.87%. Table 1 shows the detail.
China can produce several dozen varieties of oil and nearly
a thousand specifications of oil products. There were  120
crude oil processing enterprises in 1995. Of the total, 21
enterprises have a processing capacity of over  5  million
t/a. They have a total processing capacity of  around  125
.10 million t/a, accounting for more than  60. 86%  of  the
national total.
The crude oil processing capacity and processing amount  of
China Petrochemical Corporation accounted respectively for
82.4% and 83.4%  of  the  national  total  in  1995.   The
corporation has 21 large enterprises with  a  capacity  of
over 5 million t/a, 12 medium enterprises with a  capacity
of 2.5 - 5 million t/a and  6  small  enterprises  with  a
capacity of below 2.5 million t/a. Remarkable achievements
have been made by the corporation in the recent  years  in
the development and  production  of  heavy  oil  catalytic
  cracking,   catalytic  reforming,     hydrocracking   and
hydrofining catalysts. Technologies such as DCC,  MGG  and
MIO have achieved satisfactory results in development  and
application and good economic  performance  in  commercial
production.  DCC,   MGG  and  hydrofining  catalysts  have
obtained patent in China and have also  been  exported  to
other countries.
China was self-sufficient and even had a little surplus  in
oil resources before  1993.   The  oil  refining  industry
mainly processed domestic crude oil. Features of  domestic
crude oil include low sulfur content, high wax content and
great specific gravity. Most of domestic crude oil  has  a
specific gravity of over 0. 8600.   It  has  little  light
components but much heavy components. The highest  topping
rate of light components in atmospheric distillation is 27
.38%, half of the topping rate in the light  crude  oil  of
Saudi Arabia. The yield rate of heavy oil is over 44%, the
highest being 50.7%, twice the yield  rate  in  the  light
crude oil of Saudi Arabia. Based on the actual  status  in
the recent years, domestic crude  oil  is  becoming  still
heavier.
China therefore lacks raw materials for catalytic reforming
. Besides, instead of gasoline  with  high  octanol  number
(based on narrow-cut reforming),   catalytic  reforming  in
China mainly produces petroleum aromatics. The capacity of
catalytic reforming units in refineries have to be  small.
Straight-run gasoline and diesel seldom  need  hydrofining
treatment, and can usually meet the  requirements  of  oil
products  after  electro- chemical  refining.   The  above
  features  of  domestic  crude  oil  have  resulted  in  a
traditional pattern of oil refining units in China.  Table
2 shows the detail.
China processed 135.08 million tons of crude oil  in  1995,
including 116.71 million tons of domestic crude oil and 18
.37 million tons of imported crude oil. Table 3  shows  the
detail.
2. Future prospect
Due to insufficient crude oil resources in China, petroleum
products are in short supply and the product structure  is
not rational. Measures should be  taken  in  the  next  10
years to speed up readjustment, optimize structure, expand
capacity and increase the adaptability and competitiveness
of refineries to the oil product market.
(1) As domestic crude oil resources are in short supply, it
is imperative to process imported crude  oil  with  sulfur
content.
Table 4 shows the crude oil output in China in  the  recent
years.
The crude oil output  in  China  increased  at  an  average
annual rate of around 1.345% from 1991 to 1996,  around  1
.88 million tons a year. However, the  consumption  of  oil
products (main oil products of gasoline, kerosene,  diesel
and lube oil) increased at an average annual rate of 5.87%
. Based on the crude oil output in 1991, 8.58 million  tons
of crude oil will have to be increased each year in  order
to meet the market demand. The average annual shortage  of
crude oil  in  the  recent  years  is  6. 7  million  tons
(excluding the export amount). The shortage has to be  made
up by imports. China started to process imported crude oil
in 1988. Table 5 shows the detail.
(2) The crude oil processing capacity will be expanded.
The national economy in China is  expected  to  maintain