May 25, 2020 [Riviera] – The China VLCC-operated, 2017-built VLCC New Renown loaded in mid-April 2020, in Saudi Arabia and arrived at the new Sinopec Zhongke terminal in the first week of May.
The new terminal has a VLCC berth (300,000 tonnes capacity), a 100,000-tonne capacity berth and six other tanker berthing facilities, giving the terminal a capacity of 34M tonnes a year. The 100,000-tonne berth is the largest domestic refined oil terminal, with a loading and unloading capacity of 5.6M tonnes per year.
The terminal supports the Zhanjiang Integrated Refinery and Petrochemical Complex — the biggest project of its kind under construction by Sinopec Corp., and a key component of the Guangdong Province’s 13th Five-Year Plan. The project will add over 10M tonnes of refined crude oil capacity and 800,000 tonnes of ethylene units per year, in addition to auxiliary supporting facilities.
The Sinopec project was conceived nearly 20 years ago and work commenced in 2013. The original aim was to bolster supplies of petrochemical feedstock in the fast-expanding Guangdong province. Since then, two privately invested mega-refineries, Hengli Petrochemical and Zhejiang Petrochemical Corporation, each with a capacity of 20M tonnes per year, have opened. These private refinery complexes add about 10M tonnes of new oil products to a domestic Chinese market awash with oil products.
The Zhanjiang Integrated Refinery and Petrochemical Complex will start up an ethylene plant in June 2020. According to news agency Reuters, other facilities include a residue fluid catalytic cracker, a hydrocracker, a reformer and a diesel hydrotreater that are capable of producing low-sulphur fuels. It is integrated with an 800,000 tonne-per-year naphtha cracker and other petrochemical units.
Given the ongoing pandemic, the commencement of operations at the refinery could not have come at a more inopportune time. There is a global slump in crude oil demand and refined products are being produced far in excess of local demand, leading to a scramble for tankers for storage and a boost for earnings. On the positive side, the pandemic lockdown is being eased in China and there are hopes that normality is slowly returning, but this may have a negative impact on the tanker sector.
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