China's oil demand will increase faster amid better domestic economy in 2010, leading to a heavier dependence rate on import, predicted Zhu He, senior engineer of Sinopec's Economics and Development Research Institute.
According to the oil expert, the country's oil apparent consumption is estimated to increase five percent year on year to 427 million metric tons (tonnes) in 2010, while its crude oil output will likely increase slightly from a year earlier to 193 million tonnes, with the growth rate smaller than demand growth. Zhu predicted that China's dependence on foreign crude oil would increase in 2010, and its net imports of crude oil would exceed 210 million tonnes this year. China produced 189.49 million tonnes of crude oil in 2009, down 0.4 percent year on year, while consuming 380 million tonnes, up 7.1 percent. Crude oil imports in the same year reached 204 million tonnes, up 14 percent year on year, and netted 199 million tonnes, which has led the country's dependence on external supplies to reach 51.3 percent of its total, far higher than the proportion of 5.3 percent in 1995. According to Zhu, the country's gasoline apparent consumption will increase 7.5 percent year on year to exceed 72 million tonnes in 2010, as demand surges from the country's auto industry. The diesel apparent consumption is estimated to rise 7.7 percent year on year to 150 million tonnes, as demand from the industrial sector and transportation sector increases.
Zhu put that the world's oil refining capacity would maintain a rapid growth in 2010 after continuous capacity expansion in the previous years. Crude oil processing will gradually recover upon rising product oil demand amid better economy. The gross margin of refineries will remain low, but companies engaged in middle oil distillate and diesel production are gaining more profits. China's oil refining capacity is expected to keep rising rapidly in 2010. Zhu predicted that China would increase its refining capacity by 31 million tonnes in 2010, adding the total annual capacity to 510 million tonnes. The country is estimated to process 400 million tonnes of crude oil in 2010, up over five percent year on year. In the light of the requirement for developing low-carbon economy, Chinese petroleum and petrochemical companies will further accelerate readjusting the industrial structure, put more efforts in economizing energy, reducing emissions, integrating oil refining and ethylene facilities on a larger scale this year. So China's ethylene industry will also develop faster in 2010. According to Zhu, China is expected to increase its ethylene capacity by 2.5 million tonnes, adding the total annual capacity to over 15 million tonnes. This will give an impetus to the development of downstream derivatives and three major synthetic materials industries, abating the dependence on import.
China's natural gas output is expected to increase to 100 billion cubic meters in 2010, according to Zhu. Natural gas imports will also increase this year, piped natural gas imports to six billion cubic meters and LNG imports to over six million tonnes. The annual natural gas demand is estimated to exceed 100 billion cubic meters for the first time in 2010. Meanwhile, the natural gas pricing system reform will be ground out within this year, facilitating the healthy development of the natural gas industry and efficient and diversified utilization of natural gas resource.
The global oil demand growth would turn positive in 2010, up one million barrels per day to 86 million per day. The world oil supply will exceed demand slightly. It is estimated that the global oil prices will fluctuate between 65 to 100 US dollars per barrel in 2010, with the average price staying between 75 to 85 dollars per barrel. Generally, the prices will be higher in the second half of the year than in the first half. The year of 2010 will be a year of development, reform and adjustment for the world's petroleum and petrochemical industry, and Chinese oil experts believe that it will be a year to see China's petroleum and petrochemical industry grow from being big to being strong. When the international financial crisis' impact is gradually diminishing, China's petroleum and petrochemical industry has stepped out of the trough and is regaining growth in the first year of a new decade.