PetroChina to Phase Out 19 Aging Refining and Chemical Units to Reduce Overcapacity
PetroChina plans to permanently close 19 old refining and chemical units, including the shutdown of its largest refinery in Dalian by mid-2025, to address overcapacity and boost profitability. The company is focusing on higher-value petrochemicals and building a smaller, modern complex on Changxing Island, aligning with Beijing's campaign for sector modernization and efficiency improvement.
PetroChina, a state-owned oil and gas major, is undertaking a significant restructuring of its refining and chemical operations by permanently shutting down 19 aged units, including 18 that have been operating for more than two decades and one failing safety standards. This move is part of a broader state-backed campaign to reduce China’s refining sector glut and improve profitability amid declining fuel demand accelerated by rapid electrification in transportation. Notably, PetroChina is closing its largest refinery, the 410,000 barrels per day Dalian Petrochemical plant, by mid-2025. The closure will be followed by a cleanup of inventories and the gradual shutdown of secondary processing units. To replace the old facility, PetroChina has approved a major new refinery and petrochemical complex on Changxing Island, featuring a smaller 200,000 bpd refinery and advanced petrochemical units geared towards higher-value products such as materials for electric vehicles and solar power. The company is also evaluating 309 old units and 43 crude distillation units in its downstream portfolio, retaining some niche operations converting heavy crude to lubricants. PetroChina’s efforts reflect Beijing’s aim to eliminate inefficient small refineries, upgrade aging plants, and streamline chemical investments, aligning with the goal of becoming a leading global chemical firm by 2035.
