CNOOC plans to start up an upgraded joint-venture refinery complex in Ningbo with a total investment of 20 billion yuan

Industry sources said China National Offshore Oil Corporation (CNOOC) plans to start up an upgraded joint-venture refinery complex around June, marking the state-owned producer's further expansion into refining and petrochemicals.

CNOOC plans to start operating the complex on Ningbo's Daxie Island, which includes more than a dozen newly installed facilities, a 20 billion yuan (2.74 billion U.S. dollar) expansion plan that is likely to increase the company's demand for imported crude oil.

CNOOC's recent procurement bidding documents show that the major new facilities include a 120,000 barrels per day crude oil unit, a 3.2 million tons per year catalytic cracking unit, a 2 million tons per year hydrocracking unit, a 2.4 million tons per year continuous reforming unit, and two 450,000 tons per year polypropylene units.

According to industry insiders, the upgrade will expand the Daxie refinery's crude processing capacity by 50% to 240,000 barrels per day, while also expanding the plant's ability to produce raw materials for plastics and synthetic fibers.

The Daxie field expansion will bring CNOOC's total crude processing capacity in China to about 1 million barrels per day, including plants controlled and invested by the company, the sources said.

CNOOC's largest subsidiary is located in Huizhou, Guangdong Province in southern China, where the 440,000 barrel-per-day refinery controlled by CNOOC is integrated with a petrochemical complex co-invested by Shell. CNOOC manages the group's refining and petrochemical businesses.

CNOOC's refining and chemical division said on its official microblog that the crude unit at the Daxie refinery is being preheated as a preparatory work before the plant goes into production.

Earlier this year, CNOOC was awarded a rare 3 million tonnes (60,000 b/d) crude oil import quota, which traders said would be allocated to the expanded Daxie refinery, which is 33% owned by private chemical group Union King Holdings.

In addition, CNOOC is building an underground commercial oil storage base in Daxie with a total capacity of 5 million cubic meters (31.5 million barrels), according to a company procurement tender document released last September. The base will be built in two phases and is expected to be completed by the end of 2027, the document said.