China Increasing Oil Stock

As part of China's third phase strategic oil reserves, the country has announced that it will buildup its reserve capacity as commented by China's National Energy Administration Head, Zhang Guobao. China is planning to be in the league of international standard of developed countries of at least 90 days of oil rerserve.

Given China's hunger for oil, this would be a huge requirement and work will be starting on 5.4 million cubic meter oil reserve in Karamay City for a gross combined storage for the country amounting to 26.8 million cubic meters.

BP CNPC & Exxon Petronas Bidding for Rumaila Field

Oil giants U.K BP PLC with its pair China National Petroleum Corp. and U.S. oil major Exxon Mobil Corp. and Malaysia's Petroliam Nasional Bhd, or Petronas are bidding for joint offers to develop Iraq's Rumaila oil field.

Despite Iraq's long black history with the western world, the country is holding Iraq's first bidding round in 30 years for Rumaila future development oil field. Rumania's current output capacity is 1 million barrels a day, in which the Iraqi government persuing to increase by up to 1.75 million barrels a day by getting foreign participation into the country.

China Postponing Stockpiling Oil & Energy

China has announced that it is suspending the energy and oil stockpiling program due to unavailability of new storage facilities. China has been aggressively looking at its energy security for growth and stability protection especially after the global oil price hike in 2008.

China's oil stockpiling program's first phase is looking at 100 million barrels equivalent to China's 30 days of oil import for emergency usage.

Beijing administration is interested to have oil reserve in case of a crisis scenario, in particular to situations in Middlea East & Africa where most of world oil production is located now. China's plan has been regarded by analysist as getting the help from heaven as the global financial and economic crisis has put a pressure on and subsequently much lower global oil prices enabling the cash-rich Chinese to pursue the mega-plans of oil reserve.

The last phase of the strategic plan will enable China to have 100 days of total oil import enabling independance on China's soil without any foreign interference on energy usage which is the same as U.S Strategic Petroleum Reserve.

China & Myanmar Signing New Oil & Gas Pipeline Contract

A cross boarder oil and gas pipelines to enable oil and other oil-derivatives to China is already in plan as China and Myanmar signed a pipeline contract between China and Myanmar to slash the transfer time for crude oil imports.

The agreement reportedly consists of pipeline project as well as join-venture for hydropower projects. China and Myanmar plan to build 2,000-km gas and oil pipeline through Ruili and Kunming in Yunnan province which can tremendously cut out oil cargos long detour through the congested Malacca Strait.

The project is however under strict control due to Myanmar's history with human rights which means less injection of capital from external sources. As the project benefits China in great length, Beijing is offering incentives including cheap loans and tax breaks to attract foreign participation.

The World's New Currency: Oil. And China is Piling Some

As the world economy is collapsing and the energy demand is skyrocketing nevermind the usual hiccups, China is taking advantage by stocking up on foreign oil offering $43 billion in loans to foreign oil companies in Brazil, Venezuela, and Russia to secure future oil supplies and energy.

The China's new strategy is seeing by analysts as a powerful move especially as the state-owned oil companies in Russia, Brazil, and Venezuela are in needs of financial support. Analysts predicting that China oil import will double in few years after the recession placing China's oil loans as a sign of both opportunism and confidence that the economy will recover from the worldwide recession soon. 

Shanghai, China is Booming with LNG Demand

China, one of the world's biggest demand for energy, is going to be the next LNG vacuum with demand increase up to 3 billion cubic metres last year. China National Offshore Oil Corporation (CNOOC); is due to commission a terminal to receive liquefied natural gas in Shanghai in early February 2009 from Malaysia LNG Tiga. This first ever cargo is said to be about 20,000 cubic metres of gas before commercial operation in April.

CNOOC's Shanghai terminal will receive 1.1 million tonnes per annum from Petronas LNG complex in Malaysia with incremental volume up to 3 million tpa in 2012. Shanghai is now looking at ways to increase its emergency gas reserves as demand is shooting up.

China's Jianfeng Signing JV for Melamine Plant

Despite recent hiccups in melamine prices, China-based JianFeng Chemicals has signed a joint venture (JV) agreement with Austria’s Agrolinz Melamine International (AMI)for a $67 million melamine plant in southwestern Chongqing city. The melamine plant will have a capacity of 30kmta located in Baitao chemical industry park with expected construction to be determined at a later stage.

Albermarle Acquired China JVs

Albemarle, a US-based specialty chemicals maker has acquired 100% of two polymer additive joint ventures in China namely Ningbo Jinhai Albemarle Chemical & Industry, and Shanghai Jinhai Albemarle Fine Chemicals. The acquisition has moved Albemarle as the top position of manufacturer and supplier of polymer antioxidants in China doubling its antioxidant production capacity.

CNOOC to Build Petchem Complex in Hebei, China

It seems like the high price of chemical plants construction doesn't have an effect on petchem development as China National Offshore Oil Corp (CNOOC) is planning to build a petrochemical complex in Cangzhou city in northeastern Hebei province. Construction is expected to start in late 2008 with capex investment may be in the tune of $2billion. No official news have been released on the complex capacity as yet.

New Methanol and DME Plants by Hubei Biocause China

China-based Hubei Biocause Pharmaceutical Co is constructing a methanol plant and a dimethyl ether (DME) unit, both with a capacity of 200,000 tonnes/year. The chemical plants are located at Jingmen city.

The DME unit is expected to come on-stream llate 2008 completing the third phase of the total 1millin tonne/year DME chemical complex. The first phase of the project was completed in April 2007 with nameplate capacity of 100,000 tonne/year and then another 200,000 tonne/year unit was brought on-stream in June 2008 for second phase of the project.

Shanghai Petrochemical Expanding Cracker Capacity

Sinopec subsidiary, Shanghai Petrochemical, is in the midst of expanding the capacity of its No 1 cracker to 600,000 tonnes/year from 150,000 tonnes/year to build new chemical plants.

Some of the new chemical units planned are 300,000 tonne/year polypropylene (PP) unit and a 380,000 tonne/year monoethylene glycol (MEG) facility which may mean that the cracker need to be expanded up to 800,000 tonnes/year.

DOW Chemicals Growing Business in Asia

Dow Chemicals is reportedly making major investments will be made by Dow Chemicals' performance fluids business in the Asia Pacific region. New R&D chemical plants are planned for China and India in late 2008 targeting research for increasing output of new water-soluble fluids' at its Optimal JV with PETRONAS.

United States Asked China to Join International Energy Agency

It seems that the oil crisis is getting at the nerve of many Americans. The U.S. has asked that China, the second major consumption of energy after United States to join the International Energy Agency, which was set up after the oil shocks of the 1970s to help developed countries manage emergency oil supplies.

The International Energy Agency (IEA) is currently made up of the world's richest nations and China participation is hope to bring relief in the current global oil price soaring.

Chinese officials confirmed the news and was showing interests to join IEA but concerned since the group is part of the Organization for Economic Cooperation and Development, which includes most of the world's richest countries which vow to an open market economy and democratic pluralism, a concern to Communist China.

Beijing Limiting Petrochemical Production During Olympics

Some chemical plants in Beijing will be closed and some reducing operation capacity as Beijing Municipal setting a new air quality guideline during the Olympic and Paralympic games.

Sinopec subsidiary Yanshan Petrochemical is already planning a 30% capacity reduction at its facilities in the Fanshan district of Beijing.

Some other chemical players are arranging turnaround during the Olympic Game as city transport will be restricted, and products may not be delivered to other cities. The Eastern Chemical Factory, a subsidiary of Beijing Eastern Petrochemical Co, was required to stop operation by government.

China is preparing considerably for the 2008 Olympics.

PVC Producers in China Incompetitive

Due to overcapacity, the global ethylene prices expected to drop in 2008. China’s PVC producers who mainly are acetylene-based route method of polyvinyl chloride (PVC) production facing heavy competition despite China’s massive coal deposits.The acetylene-based PVC, is facing overcapacity from ethylene prices downward trend making ethylene-based PVC production to become increasingly profitable.

Coal is currently the main source of fuel for China’s power plants, and the massive growth of the Chinese economy could create a bottleneck in the supply of coal for acetylene production, something PVC producers are worrying over at the moment.

Formosa Plastics Starting It's New PP Plant

Formosa Plastics had obtained governmental approval to receive propylene feedstock at its Ningbo port terminal, with the first refrigerated propylene cargo and eventually to start feeding feedstock propylene into Farmosa Plastics's new 450,000 tonne/year polypropylene (PP) plant in Ningbo.

The start-up has had many hiccups due to governmental regulations and construction problems and the successful start-up of Formosa’s Ningbo PP plant would tighten the critical propylene supply in the market.

Methanol for Energy only for China

Methanol usage in the energy sector is widely used in China due to a number of reasons unique to the nation such as the cheap and abundant supply of coal as feedstock for making methanol.

Refining margins in China are currently negative due to lower price of gasoline and even much lower methanol prices. The factor is also driven by transportation infrastructure where local auto manufacturers are looking to capture energy market share with 'low running costs' and the Chinese government was pushing for coal to replace part of energy derived from crude.

Methanol Production Cost Arising in China

China methanol makers from medium-to-large coal methanol producers in China are feeling the pinch of rising costs whether in feedstock, inland transport and shipping. Coal prices, previously known as in abundance and unwanted in China, is the most common feedstock for methanol production in China.

Surging fuel oil costs making shipping more expensive especially since methanol cargoes are shipped within China via the country's rivers, even the inland road and rail transport has also become more expensive. On top of these factors, the yuan has appreciated and the government has curbed incentives for the methanol producers to export the product.

The greatest hit is of course the feedstock price of coal which has increased by 10-30% from last year forcing producers working with technology providers to have greater efficiency in coal gasification.

MTO Projects Spur in Inner Mongolia

China’s Inner Mongolia is spurring with methanol investments through methanol-to-olefins (MTO) projects due to its cheap and abundant coal supply with estimated of nearly 10 million tonnes/year of methanol will be produced by the next 5 years.

MTO projects such as by Datang International Power has capacity of 1.7 million tonne/year methanol with around 1.5m tonnes will be converted to propylene using Lurgi’s technology as feedstock to make around 500,000 tonnes of polypropylene (PP).

The cost of polypropylene made from this route is expected to be cost competitive, given the low price of coal in Inner Mongolia using coal gasification technology from Shell with 3 tonnes of methanol are needed to produce 1 tonne of propylene through the process.

Sinopec Collaborate with Mitsubishi Chem for New $300 Million Bisphenol-A, Plycarbonate Plant

Mitsubishi Chemical (MCC) under its partner Mitsubishi Engineering-Plastics (MEP) has formed a $300 million joint venture with China’s Sinopec for a bisphenol-A (BPA) and a polycarbonate (PC) chemical plants in China. The plants, with capacity would be 150,000 tonne/year of BPA and 60,000 tonnes/year PC will be built in Beijing starting end of 2008 with target completion in 2010.

Mitsubishi Chemicals (MCC) will provide the license for Bisphenol-A production technology together with the feedstock of diphenyl carbonate (DPC) for the polycarbonate production. Sinopec in returns will provide the key feedstocks for production of Bisphenol-A of phenol and acetone.