March 7, 2011 / 12:58 PM / 8 years ago

Sinopec Jinling refiner to up capacity; sees Q2 loss

* To raise capacity by a third to 360,000 bpd by 2015

* Keep crude runs at full capacity this year

* Refining profit before tax around 1.0 bln yuan in 2010

* Refining remains profitable in Q1 2011

* Crude cost, capped product price threaten Q2 loss

BEIJING, March 7 (Reuters) - Asia’s largest refiner China Petroleum & Chemical Corp (Sinopec) (0386.HK) plans to raise the capacity of its Jinling refinery by a third to 360,000 barrels per day (bpd) by 2015, the plant’s ex-chairman said on Monday.

The plant, on the Yangtze River in the eastern province of Jiangsu, will keep its crude runs at full capacity of 270,000 bpd this year, the same as in 2010, said Zhang Dafu, who was the chairman of Jinling until the end of last year.

He is now an inspector of Sinopec Group, a senior official at the state-owned parent company of Sinopec Corp.

“We will remove some small old facilities and add some new facilities in order to raise the quality of our oil products and improve the environment,” Zhang said on the sidelines of China’s annual parliament meeting.

Sinopec plans to add a 160,000 bpd crude oil unit and a sulphur recycling unit with a capacity of 100,000 tonnes per year (tpy) at the Jinling refinery before the end of 2011 and a 3.5-million-tpy fluid catalytic cracker in 2012, industry sources have said.

Zhang said Jinling’s refining profit before tax was around 1.0 billion yuan ($152.3 million) in 2010, slightly lower than 2009.

Refining would still be profitable in the first quarter of this year, but will be “definitely in the red” if oil prices remain at the current levels and prices of refined products, capped by the government, remain unchanged, he said.

On Saturday, Jiang Jiemin, the chairman of PetroChina (0857.HK), Sinopec’s rival and China’s second-largest oil refiner, said his firm was suffering from refining losses with crude oil above $90 per barrel. [ID:nTOE72400Q]

China raised gasoline and diesel prices by 4.1-4.5 percent on Feb. 20, the third increase since October, to push fuel prices to record high levels. [ID:nTOE71I00P]

The government said the increase was smaller than the gains in crude costs and came later than it should have due to inflation concerns.

U.S. crude CLc1 rose to a 2-1/2-year high of more than $106 a barrel on Monday as civil war brewed in Libya. [O/R]

The bulk of the oil Jinling processes is sour Middle East crudes such as those from Saudi Arabia and the company usually keeps its operating commercial crude stocks at between 15 and 20 days of consumption, Zhang added. ($1=6.567 Yuan) (Reporting by Judy Hua and Tom Miles, editing by Anthony Barker)

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