New Beijing airport to get aviation turbine fuel from CNPC unit

Petro China North China Petrochemical Company, a unit of China National Petroleum Corporation, will supply 1.7 million metric tons of aviation turbine fuel (ATF) to the new international airport in Beijing from 2019, according to a company official.

The CNPC unit located in Cangzhou, Hebei province, will also be the only oil refining and petrochemical enterprise supplier for the new airport, as it looks for ways to upgrade its product mix.

"Once the new airport is completed, which will be in the first half of 2019, we will be offering 1.7 million tons of ATF annually, accounting for over one-third of the total demand of the Beijing Daxing International Airport," said Song Yuntong, deputy manager and spokesperson of Petro China North China Petrochemical Company.

"In the long run, we will supply 2.6 million tons every year, which, currently is the capacity of our oil pipelines," he said.

According to Song, the remaining ATF needs of the airport would be met by China National Aviation Fuel Group Ltd, China's largest jet fuel supplier.

"The jet fuel we provide will be transported directly to the tank field at the new airport, using our own pipelines. Through this we can ensure that the quality and supply are reliable, along with punctuality," added Song.

"The company's decision to team up with Beijing's new airport shows that oil refining and petrochemical enterprises have started to diversify supplies depending on demand," said Li Li, energy research director at ICIS China, a consultancy that specializes in the energy market.

"By shipping jet fuel directly to the airport tank yard, oil refineries can lock down incremental energy demand and offer fixed point supply, optimizing their benefits," she said.

"This is a major breakthrough for our company. At present, the diesel fuel market in China is reaching a saturation level, and we are turning our attention to ATF to upgrade the product mix," said Song.

In addition to jet fuel demands from airports in Beijing, opportunities in the neighboring regions are also huge.

According to a feasibility study report on the Beijing Daxing International Airport, by 2025, the passenger throughput of the new airport in Daxing will be 72 million, and the number for Beijing Capital International Airport will reach 95 million. Added to this is the demand from the Tianjin Binhai International Airport. The combined ATF demand from the Beijing-Tianjin-Hebei region would be 9.8 million tons annually by then.

Besides, the airport guidelines issued by the Hebei Provincial Development and Reform Commission last year indicated that by 2020, there will be over 30 general aviation airports in Hebei, and the number will reach 50 by 2030.

"We plan to grasp the opportunity brought by the new airport in Beijing, to cooperate with other nearby civil airports, further opening up the market," said Song.

"With the numerous opportunities brought by the new airport, oil refineries can stay tuned with China's aviation industry, serving both domestic and international airlines. In this way, the enterprises can achieve collaborative development with the airport," Li said.