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Chinese Refiners Looking For More Product Out Of The "Bottom Of The Barrel" To Boost Returns

Survey finds Chinese refiners expect profitability to increase significantly after implementing residue upgrading technology.
SHANGHAI, Nov. 24, 2015, Chinese refiners are looking to get more product out of every barrel of oil especially the hard-to-refine "bottom of the barrel" residue over the next decade, according to a comprehensive survey of both state-owned and independent Chinese refiners. The survey was conducted on behalf of Honeywell UOP (NYSE: HON), which is a recognized leader in refining technology.The industry survey of managers and technical engineers was conducted by Chem1, a Beijing-based firm specializing in providing consulting services to the refining and petrochemical industries. The survey found that interest in upgrading technology is driven by a refiner's need to better process heavy crude oil and get more useable, high-value products such as transportation fuel from every barrel."China is the world's largest importer of crude oil. Getting more useable products from each barrel is critical to their operations, especially as they seek to take advantage of low-priced heavy crude, which is significantly harder to refine," said Zhiming Huang, general manager of Honeywell UOP in China. "Coupling that challenge with increasingly stringent fuel and emission standards, Chinese refineries are hungry for a breakthrough technology to enable more profitable operations by finding more gold' in the bottom of every barrel."Among the survey findings:
  • Each of the 150 respondents said residue upgrading technologies are of "great importance" to their current business and that upgrading crude residue will remain a top priority in the next decade.
  • Respondents expect profitability to increase significantly after upgrading to residue processing technology.
  • Of those surveyed, 83 percent said the need to upgrade heavy crude oil and improve conversion of light oil was a driving factor in their interest in upgrading technology.
  • Respondents were asked which products they prefer to manufacture in higher quantities. One-hundred percent of respondents chose gasoline and diesel, which help improve the profitability and level-up cost pressure of the enterprise.
  • The majority of respondents believe hydrotreating and hydrocracking are the best technology routes to process crude residue at Chinese refineries. Most also said they were not optimistic about the future prospects of traditional delayed coking processes due to their lower light oil yield, high output of lower-value coke and overall lower economic benefits.
Honeywell UOP is a leader in process technology, catalysts, adsorbents, equipment and services to the petroleum refining, petrochemical and gas processing industries, and its technology is used extensively in China. Honeywell UOP offers a range of upgrading technologies, including the UOP RCD Unionfining™ process and the Resid FCC process. In 2008, the company introduced its newest bottom-of-the-barrel residue upgrading technology, UOP Uniflex™ technology, which can convert more than 90 percent of the bottom of the barrel to high-value transportation fuels.Chem1 interviewed more than 150 managers and technical engineers from 50 Chinese refineries, including state-owned PetroChina, Sinopec, CNOOC, as well as key players in the private sector.Honeywell Performance Materials and Technologies (PMT) is a global leader in developing advanced materials, oil and gas processing technologies and industrial automation solutions. PMT's Advanced Materials businesses manufacture a variety of high-performance products, including environmentally friendlier refrigerants and materials used to manufacture products such as bullet-resistant armor, nylon, computer chips and pharmaceutical packaging. Process technologies and equipment from PMT's UOP business ( are the foundation for the world's oil and gas industry, efficiently producing gasoline, diesel, jet fuel, petrochemicals, natural gas and renewable fuels. PMT's Process Solutions business ( is a pioneer in automation control, instrumentation and services for the oil and gas, refining, pulp and paper, industrial power generation, chemicals and petrochemicals, biofuels, life sciences, and metals, minerals and mining industries.Honeywell ( is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; turbochargers; and performance materials. This release contains certain statements that may be deemed "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.