Thirsty for Resources

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The last post looked at China’s “Hunger for Resources”. This one focuses on its thirst – for oil (water will get its very own post later).

China’s net imports of crude oil were up 17.6 percent in the first six months of the year, to 70.33 million tons (according to People’s Daily).It is also suggested that imports will account for 50 percent of the total by 2010, up from 40 percent in 2004. But it is not all about imports. People’s Daily reports that:

    “China produced 91.664 million tons of crude oil in the first 6 months of the year, a rise of 2.1 percent on the corresponding period last year, said sources with the China Petroleum and Chemical Industry Association (CPCIA)…Output of refined oil products was 84.822 million tons, up 5.6 percent year on year”.

The growth in consumption has come together with growth in capacity – and a US$5 billion joint venture refinery project in Guangdong has just been approved. The parties are Sinopec and Kuwait Petroleum, and the project overtakes the CNOOC / Shell joint venture as the biggest in China.
Forbes reports that the project will have an refining capacity of up to 15 million tons. It will also have capacity for 1 million tons of ethylene.

China’s energy demands will continue to impact world oil prices (though they are far from the only driver), but will also have increasing strategic and political impact as relations with oil-rich countries become critical to sustained, stable development at home – and as competition with the world’s biggest energy user (no names!) increases.

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