China's economic slowdown, which in turn is stalling the country's oil demand growth, has forced state-run oil firms to scale back their refining capacity expansions.

Beijing is rolling out new policies to stimulate economic growth, with the slowdown evident in the country's latest oil data. Chinese apparent oil demand — domestic output plus net imports — in January-April was 3pc up against the previous year, compared with growth a year earlier of 10pc.

Chinese oil firms, already struggling with weak refining margins that stifle their profitability, are responding to the slowdown by reining in planned refinery expansions. Sinopec will put in place less refining capacity this year than planned, taking some of the pressure off PetroChina to expand amid increased competition in its mainstay northern China market. CNOOC has abandoned plans to build or acquire new refineries between now and 2015, although it still wants to expand its existing plants.

Sinopec is postponing the expansion of its 270,000 b/d Maoming refinery in south China's Guangdong province to 510,000 b/d, with it likely to come on stream in early 2013 instead of this year. The only other Sinopec project confirmed to start up this year is an expansion of its 110,000 b/d Anqing refinery in central China's Anhui province to 160,000 b/d in the fourth quarter. Sinopec plans to postpone a project to add 60,000 b/d to its 100,000 b/d Shijiazhuang refinery in north China's Hebei province to 2014 from this year.

Total net refining additions by Sinopec this year are likely to be 160,000 b/d, down from an original plan of 400,000 b/d. China's total capacity additions this year are likely to be 530,000 b/d, compared with initial plans to add slightly above 1mn b/d. These plans had already been revised down to 800,000 b/d by the second quarter.

PetroChina has decided against expanding its 130,000 b/d Jinxi refinery in Liaoning province to 200,000 b/d after repeatedly failing to secure government approval. Beijing is concerned that demand in Liaoning is not growing fast enough to warrant the expansion. PetroChina's 260,000 b/d joint-venture refinery with Russia's Rosneft in Tianjin municipality is now unlikely to start up until after 2015. A foundation ceremony for the $4.7bn project took place in September 2010 but the venture has not been approved by economic planning body the NDRC.