South Korean oil refiners will benefit from a rise in China's oil demand, largely due to their geographical proximity and the growing number of cars in the neighboring country, Yonhap News Agency said Tuesday, citing an industry report.
China, the world's second-biggest energy consumer, is expected to turn from a net gasoline exporter to a net importer as demand grows at a fast pace in line with automobile growth, according to the report by Shinhan Investment Corp.
Despite the slumping economy, China's gasoline consumption grew 11.4 percent on-year in the first eight months of this year, much higher than the average 6.6 percent growth for the previous three years.
The country's gasoline consumption growth is likely to accelerate to a rate of 15 percent from 2013 through 2015, Shinhan Investment said.
The US has 240 million vehicles that consume 10 percent of the global oil supply, while China has 100 million vehicles consuming only 2 percent of the supply, it said. The financial firm forecast China's gasoline demand will continue to grow steadily, saying an increase in cars will lead to more creation of infrastructure, such as highways.
Recognizing the potential growth, China is rushing to increase the capacity of its refining facilities, it said.
While two to three new refining facilities are scheduled to be set up in China each year, that is not enough to keep up with the country's surging demand, at least until 2015, the report said. China's oil demand has been growing by 200,000-300,000 barrels per day (bpd) annually for the past few years, it added.
South Korean refining firms, such as SK Innovation Co. and GS Holdings Corp., will see their sales expand in China helped both by their closeness to the Chinese market and by their recent increase in the output of gasoline, it added.
Kuwait is South Korea's No. 2 crude oil supplier, providing 376,000 barrels per day (bpd) in September.