China's oil product imports from the Middle East countries will pose a challenge to its domestic producers, Feng Shiliang, deputy secretary general of China Petroleum and Chemical Industry Association (CPCIA) was quoted as saying by Shanghai Securities News on Thursday.

He said a number of petrochemical projects would be put into operation in oil-producing countries in the Middle East in 2010, which may lead to inflow into China of cheap petrochemical products in big quantities and in turn posing a major threat to the domestic producers.

The cost of the Middle East oil products could be about 30 percent cheaper than home-made products in China even when the transportation fee and import tariffs are included, the CPCIA official said.

According to him, the Middle East region has become the world's major ethylene producing base in recent years. The additional annual ethylene production capacity will be averaged at about four million metric tons during 2008 to 2013.

The ethylene output capacity would add 16 million metric tons a year by 2013, accounting for 47 percent of the world's total added capacity at that time, he said.

Source: Downstream Today