Bloomberg reported that PetroChina Co China second largest oil refiner will start production at an expanded Ningxia refinery at the end of 2011 a year later than initially planned.

CNPC said the 5 million tonnes a year refinery in northwestern China can produce 1.67 million tonnes of gasoline and 2.29 million tons of diesel a year. The expansion cost CNY 7 billion and the upgraded refinery will produce fuels that meet China IV standards which require lower emissions.

CNPC said in its annual research report on February 4th China state refiners are increasing refining capacity to meet rising demand in the world fastest growing major economy. The nation may face an oversupply of oil products this year as it adds 31.5 million tonnes a year of refining capacity.

CNPC said the Ningxia expansion will include a 5 million tonnes crude distillation unit a 2.6 million tonnes catalytic cracking unit and a 600,000 tonne reforming unit among 10 facilities to be built. PetroChina will shut its existing 1.5 million tonne plant at Ningxia once the new refinery starts. It didn't give a reason for the plant delay.

(Sourced from Bloomberg)