China continues to drive Asia’s refinery CDU capacity additions through 2026

Source: press release, 9 March 2022

New build and expansion refinery CDU capacity additions in Asia by key countries, 2022-2026 (mbd) (source: Downstream Analytics, GlobalData Oil and Gas)
New build and expansion refinery CDU capacity additions in Asia by key countries, 2022-2026 (mbd) (source: Downstream Analytics, GlobalData Oil and Gas)

China is expected to dominate Asia’s refinery crude distillation unit (CDU) capacity additions, contributing about half of the regions’ total CDU capacity additions between 2022 and 2026, says GlobalData, a data and analytics company.

GlobalData’s report, Global Capacity and Capital Expenditure Outlook for Refineries, 2022-2026 reveals that China is expected to witness a total CDU capacity additions of 3.4 million barrels per day (mmbd), of which 2.8 mmbd would be from new build projects and rest is from expansion projects.

In China, eight new build CDU refineries are likely to start operations by 2026, of which five are planned with identified development plans and the remaining three are early stage announced refineries. Yulong and Jieyang are the largest new build refineries, each with a CDU capacity of 400 thousand barrels per day (mbd).

Bhargavi Gandham, Oil and Gas Analyst at GlobalData, comments, “Strong economic growth and rising demand for petrochemicals and petroleum products are the primary drivers for refinery capacity additions in China.”

GlobalData expects India to be the second-highest contributor to Asia’s refinery CDU capacity additions with a total of 1.6 mmbd by 2026. The Barmer and Nagapattinam II refineries account for the entire new build capacity additions in the country, each with a capacity of 180 mbd.

Bhargavi adds, “Large investments by state-owned refining companies, and upgradation of refining technologies are expected to boost refinery capacity and reduce costs in India.”

Indonesia is expected to add third largest refinery CDU capacity additions in Asia with 526 mbd by 2026. The Java Island refinery is the largest refinery in the country expected to start operations by 2026. It has a capacity of 100 mbd and is expected to start operations in 2025.