Production at China’s Yulong Refinery to Start in 1H 2025: FGE

China’s Shandong-based Yulong Refinery is expected to start stable and on-spec production in 1H 2025 according to FGE. Construction of the project is still ongoing, and no major units have been completed or undergone testing.

• The refinery and associated petrochemical facilities are expected to be ready around 2Q 2024, followed by crude for line filling and stock building ahead of trial runs in 3Q 2024.
• The 400kb/d refinery did not receive crude import quota in the latest batch despite some previously expecting trial runs as early as the end of 2023.
• The early release of crude import quotas and fuel export quotas for 2024 indicates continued government supporting the refining industry, providing flexibility to capture better margins when available. China’s fuel exports can sustain at 890kb/d through to mid-2024 on the first batch of fuel export quotas.
• Marginal transport fuel demand growth in China and weak refining margins compared with a year ago will weigh on refinery operations with Shandong independent refinery runs down by 100kb/d in 1H y/y.