PetroChina's Lanzhou refinery plans maintenance in May that will cut output by up to 500,000 tonnes, and is eyeing investments to boost fuel quality and expand petrochemicals, the plant's head said on Friday.

General Manager Yu Baocai said he is currently losing around 1 billion yuan ($140.7 million) a month on the refining section of the business, which also includes downstream products, because of a yawning gap between soaring world crude prices and state-set refined product prices.

He estimated Lanzhou could break even when oil prices CLc1 were around $60 a barrel, but they are currently stuck over $100. Across other PetroChina refineries, the point of profitability varied depending on scale and technology, he added.

The refinery has been racking up losses for years. Yu said he could not pinpoint the last time it turned a profit, but because parent company China National Petroleum Corporation (CNPC) is a state-owned enterprise, the bottom line is not their priority.

"We are a state-owned company, so we have to fulfil our duty to society and the economy. Especially when market conditions are tight.. meeting demand is our first responsibility," Yu told reporters on the sidelines of the annual session of China's Parliament, where he is a delegate.

The plant will run at around full capacity this year, and expects to make a loss after bleeding some 4 billion yuan from its refining arm in 2007 and a similar amount in 2006.

An expansion completed last year brought refining capacity to 10 million tonnes a year, equivalent to around 200,000 barrels per day, and ethylene capacity to 700,000 tonnes a year -- though more throughput means higher losses.