In Asia and the Middle East, at least nine refinery projects are beginning operations or are scheduled to come online before end 2023. At current planned capacities, they will add 2.9 million b/d of global refinery capacity once fully operational, according to analysis from the US Energy Information Administration (EIA).
In the International Energy Agency’s (IEA) June 2022 Oil Market Report, the IEA expects net global refining capacity to expand by 1 million b/d in 2022 and by an additional 1.6 million b/d in 2023. Net capacity additions reflect total new capacity minus capacity that has closed.
The scheduled expansions follow a period of reduced global refining capacity. Net global capacity declined in 2021 for the first time in 30 years, according to the IEA. The new refinery projects would increase production of refined products, such as gasoline and diesel, and in turn, may reduce the current high prices for these products.
China’s refinery capacity is scheduled to increase significantly this year. Trial crude oil processing at the estimated 320,000 b/d Shenghong petrochemical plant in Lianyungang began in May 2022. PetroChina’s 400,000 b/d Jieyang refinery is expected to come online in third-quarter 2022. A planned 400,000 b/d Phase II capacity expansion also began operations earlier this year at Zhejiang Petrochemical Corp.’s (ZPC) Rongsheng operation.
Outside China, the 300,000 b/d Malaysian Pengerang refinery (RAPID refinery) restarted in May 2022 after a fire forced a shutdown in March 2020. In India, the Visakha refinery is undergoing a major expansion, scheduled to add 135,000 b/d by 2023.
New projects in the Middle East are also likely to be an important source of new refining capacity. The 400,000 b/d Jizan refinery in Saudi Arabia reportedly came online in late 2021 and began exporting petroleum products earlier this year. More recently, the 615,000 b/d Al Zour refinery in Kuwait—the largest in the country when it becomes fully operational—began initial operations earlier this year. A new 140,000 b/d refinery is scheduled to come online in Karbala, Iraq, this September, targeting fully operational status by 2023. A new 230,000 b/d refinery is set to come online in Duqm, Oman, likely in early 2023.
These estimates do not necessarily include all ongoing refinery capacity expansions. Moreover, many of these projects have been subject to delays, and the possibility of partial starts or continued delays related to logistics, construction, labor, finances, political complications, or other factors may result in projects coming online later than estimated, EIA said.
