PetroChina to Retire 19 Inefficient Refining and Chemical Units
PetroChina plans to permanently retire 19 old and inefficient refining and chemical units as part of China's effort to reduce overcapacity in the downstream sector. The company will shut down an outdated unit failing safety standards and phase out units operating longer than 20 years. Despite falling gasoline output, jet fuel production rose notably this year. PetroChina is transitioning toward higher-end refining and chemical products to improve profitability and industry sustainability.
Facing challenges from overcapacity and low demand in China’s refining and petrochemicals sector, PetroChina is set to retire 19 inefficient and aging production units. This includes permanently closing one unit that fails to meet safety standards and phasing out 18 other units with operational histories exceeding two decades. These moves align with the Chinese government’s broader initiatives to trim refinery capacity and address sector glut, which has squeezed margins and led to losses among refiners. According to PetroChina's Q3 earnings, gasoline output declined by 4.8% year-on-year, while diesel production remained flat. However, jet fuel production increased by 9.5%, reflecting stronger demand. The company is simultaneously advancing its strategic shift toward mid-to-high-end refining and new chemical materials, aiming to increase production of high-value products such as specialty chemicals, which are seeing healthier demand in sectors like AI, biomedical, and alternative energy. This transition is part of a wider industry trend of reducing excessive competition and promoting smarter, greener, and more profitable operations. PetroChina has also reported increased revenues and profits in its refining and chemicals business segments amid these efforts. The unit retirements contribute to China's goal of managing overcapacity that affects both the domestic and wider Asian markets, improving sector health over the medium term.
