China is boosting its VLSFO production. Image Credit: File Image / Pixabay
Chinese oil producer Jinxi Petrochemical has delivered its first shipment of very low sulfur fuel oil (VLSFO), parent company CNPC said Friday, as a change in taxation prompts the country’s refiners to boost bunker fuel output.
Jinxi sent a 3,000 mt VLSFO cargo from its plant in the north-east of the country to the growing bunker port of Zhoushan on March 6, CNPC said in a statement on its website.
The company has been researching VLSFO blends since March 2019 and identified 18 possible formulas that meet International Organization for Standardization specifications and its customers’ requirements.
Jinxi will develop its VLSFO production capacity towards a target of 700,000 mt/year, CNPC said.
China has applied a long-awaited rebate on value added tax on fuel oil this year, incentivising domestic refiners to produce VLSFO in large quantities.
The change may see ports like Zhoushan take market share away from hubs like Singapore.