**Progress in the construction of seven world-class petrochemical bases

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The \"Plan for the Development and Layout of the Petrochemical Industry\" formulated by the National Development and Reform Commission in 2015 called for promoting the clustered development of this industry, with the aim of establishing seven world-class petrochemical hubs: Shanghai Caojing, Ningbo in Zhejiang, Huizhou in Guangdong, Gulei in Fujian, Changxing Island in Dalian, Caofeidian in Hebei, and Lianyungang in Jiangsu. Last year, the Dalian Hengli petrochemical project continued to make progress, several projects were established in Huizhou, and all petrochemical bases accelerated their development efforts. By 2025, the refining capacity of the seven major petrochemical bases is expected to account for 40% of the country’s total refining capacity. In addition to these seven major petrochemical bases, petrochemical projects in Maozhan and Panjin are also being developed in an orderly manner, and Shandong has planned petrochemical projects with a capacity of tens of millions of tons. Today, Qianli will give you a comprehensive overview of China’s multi-million-ton petrochemical bases, and detail the progress being made at these facilities. According to public reports, among the seven major petrochemical industry bases, Hengli in Dalian Changxing Island has been the first to be completed and put into operation. China Huayang Economic and Trade Group and Fujia Group have signed an agreement to jointly build a refining and chemical integration project with an annual capacity of 20 million tons ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif2 The second phase of the expansion project at Huizhou Refining and Chemical Plant in Guangdong was completed and put into operation in 2017; the plant’s crude oil processing capacity now amounts to 22 million tons ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif3 The Fujian Gulei project has begun construction ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif4 There is currently no substantial progress on the project in Caojing, Shanghai ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif5 There are 7 refining and chemical processing projects under development in Cao Feidian, Hebei. Apart from the project of Xuyang Petrochemical, for which the environmental impact assessment has just been made public for the second time, no substantial progress has been made on the other projects ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif6 Shenghong Refining & Chemical in Lianyungang, Jiangsu, officially began operations at the end of last year ； file:///C:/Users/ADMINI~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif7 The three projects involved in Ningbo, Zhejiang are all being actively progressed. The Dalian Changxing Island Petrochemical Industry Base includes the Changxing Island area and the Xizhongdao area, and is planned to develop a petrochemical industry system centered on integrated refining and chemical processing projects, with carbon-based chemicals, chlor-alkali chemicals, and marine chemicals serving as supporting elements. By 2030, the scale of integrated oil refining and petrochemical operations will reach 40 million tons, with a long-term target of 60 million tons. On February 29, 2012, the construction of the Nishinakajima Petrochemical Industrial Park began. With a focus on diversifying olefin raw materials, efforts were made to develop the carbon-1 chemical industry chain, thereby creating a cluster for the advanced processing of petrochemicals ； With new chemical materials as the main focus, we will vigorously develop high-tech chemical industries to enhance the competitiveness of the park. The 20-million-ton/year integrated refining and petrochemical project of Hengli Petrochemical has now completed the entire production process. It is successfully producing products such as gasoline, diesel, jet fuel, and PX, with stable production operations. It is **the first approved private integrated refining and chemical project**, and it is also the **world-class petrochemical project that was built and put into operation earliest among the seven major petrochemical industry bases**. The project began construction in April 2017, and it took 19 months to complete all the work from construction to the vehicle’s operation. The construction includes large-scale processing units such as a 20 million-ton atmospheric and vacuum distillation unit, an 11.5 million-ton heavy oil hydrogenation unit, a 9.6 million-ton reforming unit, a 4.5 million-ton aromatics unit, and a 1.3 million-ton mixed hydrogenation unit. The world’s most advanced full hydrogenation and fluidized bed hydrogenation processes are employed to produce the highest quality refined oils and chemical products from even the lowest-quality crude oil ； By utilizing world-leading environmental protection wastewater treatment technologies, we strive to build a world-class refining and chemical plant that is efficient, energy-saving, green, and environmentally friendly. China Huayang Group and Fujia Group’s 20 million tons per year integrated refining and chemical project: Fujia Group and Huayang Economic and Trade Group are jointly investing in this 20 million tons per year integrated refining and chemical project, with $1 billion in foreign investment to be brought in. The project primarily produces aromatics, ethylene, propylene, and other high-end, high-value-added chemical products, thus establishing a full industrial chain development model ranging from crude oil to chemical products. § On the afternoon of November 9, 2018, China Huayang Economic and Trade Group and Fujia Group officially signed a strategic cooperation agreement to jointly develop a 20-million-ton-per-year integrated oil refining and chemical project on Changxing Island. The Shanghai Caojing Chemical Industry Park is the core area of Shanghai’s Caojing petrochemical industry base. The park has accumulated numerous domestically pioneering experiences in safety and environmental regulation. The planned integrated oil refining and chemical production project will be constructed in accordance with the most advanced international standards, and its emissions must meet all regulatory requirements. If this target is not achieved, according to the newly revised environmental protection laws and under the new regulatory requirements, the date of completion could also be the date on which operations cease. The Takahashi Petrochemical Kaojing Integrated Refining and Chemical Project is located in the western area of the Shanghai Chemical Industry Park, at the border between Jinshan and Fengxian districts. It plans to build an integrated refining and chemical complex with a capacity of 20 million tons per year for oil refining and 1 million tons per year for ethylene production. § In early June 2012, the environmental impact assessment for the Takahashi Petrochemical Caojing integrated refining and chemical project was publicly displayed on the Shanghai Environmental Hotline website, in order to gather opinions and suggestions from various sectors of society regarding this project. § On October 15, 2013, the **National Development and Reform Commission issued a reply stating its approval for Sinopec to carry out the preliminary work for the integrated refining and chemical project at its Shanghai Gaqiao branch, authorizing the undertaking of all relevant preliminary activities. § There is currently no substantial progress. The Daya Bay Petrochemical Zone in Huizhou, Guangdong, has developed an oil refining capacity of 22 million tons per year, making it one of the largest petrochemical industrial bases in China in terms of integration, high-level development, green and safe practices, comprehensive infrastructure, standardized management, and high-quality growth. In 2018, several major projects were established in Huizhou, Guangdong. By 2020, the oil refining capacity of the Huizhou Daya Bay Petrochemical Zone is expected to reach 40 million tons. CNOOC Huizhou Refining and Chemicals Phase II Project: Located in the Daya Bay Petrochemical Park, this project has a total investment of 46.6 billion yuan and involves the construction of a refining facility with an annual capacity of 10 million tons. § In July 2013, CNOOC built a second phase of facilities comprising a 10 million tons per year refining plant and a 1.2 million tons per year ethylene plant, based on the 12 million tons per year refining complex at Huizhou Petrochemical. § On October 2, 2017, the trial run was successful. The crude oil processing capacity of CNOOC Huizhou Petrochemical Co., Ltd. will reach 22 million tons per year. The Gulei Petrochemical Base in Fujian is developed based on the Gulei Port Economic Development Zone in Zhangzhou. The planned area is located on the Gulei Peninsula in Zhangpu County, Zhangzhou City, Fujian Province, covering an area of 50.9 square kilometers, of which 34.6 square kilometers are land and 16.3 square kilometers are marine areas. The functional zoning of the base area is divided into “one corridor and three zones”. “The \"corridor\" refers to an infrastructure corridor established on the west side of the base, serving as its main logistics route. “The “three zones” refer to the petrochemical industry zone, the port and logistics warehousing zone, and the public tank farm of the base, which serve as the areas for the construction of the base’s production facilities and supporting infrastructure. Among them, the Petrochemical Industry Zone is located in the middle of the Gulei Peninsula, with a planned area of 34.8 square kilometers. The Fujian Gulei Petrochemical Integration Project is being constructed by Fujian Gulei Petrochemical. Fujian Gulei Petrochemical was jointly established as a 50-50 joint venture between Fujian Refining & Chemical Co., Ltd. and Taiwan’s Hsu Teng Investment Co., Ltd. § In December 2014, Fujian Refining & Chemical Co., Ltd. and Xuteng Investment Company signed the “Framework Agreement on Business Principles for Cooperation in the Cross-Strait Joint Venture Project for the Integrated Refining and Chemical Complex in Gulei, Zhangzhou, Fujian” in Taipei. § On November 7, 2016, Gulei Petrochemical held an inauguration ceremony in Xiamen. § On November 3, 2017, the construction of the Fujian Gulei integrated refining and chemical complex project was launched. § Construction officially began on December 26, 2017. § On October 19, 2018, Fujian Gulei Petrochemical Co., Ltd. issued the \"Outline for Production Preparation Work of the Gulei Refining and Chemical Integration Project,\" marking the full commencement of the production preparation efforts for this project. § At present, the pile foundation work for the Gulei refining and chemical integration project is being carried out step by step. On April 12, 2018, the General Office of Hebei Province issued a reply approving, in principle, the “Overall Development Plan for the Caofeidian Petrochemical Industry Base”. The plan calls for a focus on developing integrated refining and petrochemical operations, industrial chains, and high-value-added projects. The base is planned to have a refining capacity of 50 million tons, a light hydrocarbon processing capacity of 10 million tons, an ethylene production capacity of 4 million tons, and an aromatic hydrocarbons production capacity of 5 million tons. This is aimed at optimizing the layout of the petrochemical industry in the Beijing-Tianjin-Hebei region and meeting the demand for clean energy and petrochemical products in North China and the Bohai Sea area. Sinopec Caofeidian 10-million-ton oil refining project: The Sinopec Caofeidian 10-million-ton oil refining project was invested in and constructed by Sinopec’s Yanshan Branch in Beijing. The total investment amounted to 26.765 billion yuan, of which 24.247 billion yuan was spent on construction; the project covers an area of 3,907 mu. § In 2005, Hebei Province negotiated with Sinopec to build an integrated refining and chemical project in Caofeidian. § In November 2007, Sinopec and Hebei Province jointly submitted a proposal for this project to the National Development and Reform Commission. Subsequently, relevant authorities completed multiple documents, including the preparatory application report for the Caofeidian oil refining project and the application report for approving the 10-million-ton-per-year oil refining project in Caofeidian. § In February 2012, CEC organized expert evaluations, and the project plan was adjusted from 10 million tons per year of oil refining to 12 million tons per year of oil refining plus 1 million tons per year of PX production. § In May 2013, the vast majority of preliminary supporting documents were approved. § In July 2014, the Ministry of Environmental Protection approved the project’s environmental impact assessment report; on December 31, the **Development and Reform Commission issued the approval document. § There is currently no substantial progress. Hebei Yihong’s 15 million tons per year integrated refining and chemical processing project: Hebei Yihong Petrochemical Co., Ltd.’s 15 million tons per year integrated refining and chemical processing project involves the construction of a vacuum distillation unit with a capacity of 15 million tons per year. § Signed in 2015. § At the end of 2015, construction began on a commercial crude oil reserve facility with a capacity of 2.8 million cubic meters. § October 7, 2016: Public notice regarding the sea area designated for the project. The environmental impact assessment has been approved, the design work is largely complete, and the timing for equipment procurement is uncertain. § There is currently no substantial progress. On November 30, 2013, in Lianyungang, Jiangsu Province, the General Office of the National Development and Reform Commission issued the “Reply on the Planning Compilation for the Lianyungang Petrochemical Industry Base and the Preliminary Work for Phase I of the Project” (Document No. FGBCY [2013] 2924). The designed refining capacity is 50 million tons per year, with an estimated total investment of around 200 billion yuan. It is regarded as a measure to change the productivity distribution in Jiangsu Province, which has historically favored southern Jiangsu at the expense of central and northern Jiangsu, thereby helping to adjust the overall productivity layout of the province. Upon completion, it will serve as an energy and raw material industry base for the development of related industries and economies in the Yangtze River Delta region, the coastal areas of Jiangsu Province, and the areas along the New Eurasian Land Bridge, thereby facilitating the establishment of upstream and downstream petrochemical industry chains in these regions. In August 2018, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly issued the \"Petroleum and Chemical Industry Planning Scheme (Revised Version)\」, establishing a new petroleum and chemical industry base in Lianyungang, Jiangsu, and explicitly calling for the advancement of the Shenghong Group’s integrated refining and chemical processing project. The Shenghong integrated refining and chemical project with an annual processing capacity of 16 million tons requires an investment of around 77.5 billion yuan. It will have the capability to process 16 million tons of crude oil per year, and is expected to be completed and put into operation by 2021. By then, it is anticipated that the annual output value will reach around 120 billion yuan, with profits and taxes exceeding 20 billion yuan. This project will help Shenghong Group develop a complete high-end textile industry chain consisting of \"crude oil – aromatics – PTA – polyester – fibers\", as well as a distinctive petrochemical industry chain based on \"crude oil + alcohols – olefins – fine chemicals\". These two industry chains will support Shenghong’s efforts to make it part of the world’s top 500 companies. § On December 14, 2018, construction officially commenced. The Ningbo Petrochemical Industry Base in Ningbo, Zhejiang, is developing in the direction of \"diversified raw materials, high-end products, industrial cluster development, and green and low-carbon operations.\" It focuses on the refining of crude oil, emerging petrochemical industries, and high-end specialty chemicals, with the goal of establishing a highly competitive, world-class green petrochemical industry base by 2020. Zhenhai Refining & Chemical is expanding its oil refining capacity by 15 million tons per year. Currently, it has a refining capacity of 23 million tons per year and an ethylene production capacity of 1 million tons per year; together with a deep-water port handling 45 million tons per year and storage facilities covering over 3.3 million cubic meters, these elements constitute an industrial framework characterized by large-scale oil refining, large-scale ethylene production, large ports, and large storage capacities. After the expansion, the Zhenhai Refining & Chemical Base will see an additional refining capacity of 15 million tons, bringing its total refining capacity to 38 million tons. § On December 20, 2018, a tender announcement was issued for the “Expansion project of Sinopec Ningbo Zhenhai Refining & Chemical Co., Ltd.: 15 million tons per year of oil refining capacity and 1.2 million tons per year of ethylene production capacity”. § Around 2020, the Zhenhai Refining and Chemical Complex expansion project will be carried out. Following the completion of the product upgrading and expansion project carried out by CNOOC Ningbo Daxie Petrochemical Co., Ltd. as part of the Daxie Petrochemical products upgrading, expansion and renovation project, Daxie Petrochemical’s capacity for primary processing of crude oil is 14 million tons per year, while its overall processing capacity is 12 million tons per year. § On January 17, 2019, a tender announcement for safety pre-assessment services was issued. In addition to the seven major petrochemical bases, areas such as Zhoushan in Zhejiang, Maoming and Zhanjiang in Guangdong, and Panjin in Liaoning have also seen a surge in the construction of refining and chemical processing projects. Shandong, a major chemical industry province, has planned a refining and chemical integration project with a capacity of 40 million tons. The Zhoushan Green Petrochemical Base is located in Zhoushan City, in the northeast of Zhejiang Province, and primarily hosts the Zhejiang Petrochemical integration project. The Zhejiang Petrochemical Integration Project was established through a joint venture involving four companies: Rongsheng Holding, Juhua Group, Tongkun Holding, and Zhoushan Haitou. With a total investment of 173.08 billion yuan, the project is being developed in two phases, with an overall capacity of 40 million tons per year for oil refining, 8 million tons per year for p-xylene, and 2.8 million tons per year for ethylene. According to the Notice issued by the Ministry of Commerce on December 28, 2018, titled \"Notice on Allocating the First Batch of Quotas for Non-state-owned crude oil imports in 2019\" (Document No. 787), Zhejiang Petrochemical was allocated a quota of 4 million tons, to be used for production preparations and processing needs during the year 2019. To date, Zhejiang Petrochemical has obtained a total of 9 million tons in import quotas for crude oil under non-state trade, providing a solid supply of raw materials for its trial production. § On July 10, 2017, the first phase of Zhejiang Petrochemical’s 40 million tons per year integrated refining and chemical processing project officially commenced construction. § In 2018, the project successfully entered the final stage of infrastructure construction and equipment installation. § In 2019, efforts were made to ensure the complete construction and safe operation of Phase 1 of the green petrochemical base project, the full commencement of Phase 2, and the initiation of the approval process for Phase 3. The construction of the Maoming-Zhanjiang integrated refining and chemical complex is an important part of the strategic cooperation between Sinopec and Guangdong Province. By fully launching the development of this integrated complex and accelerating the construction of related projects, it is possible to make overall plans for the allocation of resources and the development of the refining and chemical industry in Maoming, Zhanjiang, as well as in Guangdong Province and the Beibu Gulf region. The goal is to turn this complex into a world-class integrated refining and chemical facility as well as a leading hub for high-end petrochemical industries. The Maozhan Refining and Chemical Complex is currently composed of Maoming Petrochemical, Zhanjiang Dongxing Refining and Chemical, and the under-construction Zhongke Refining and Chemical. The operating capacity for refining is 25 million tons per year, including 20 million tons from Maoming Petrochemical and 5 million tons from Zhanjiang Dongxing Company. The Sino-Kuwaiti joint Guangdong refining and chemical integration project, which is part of the Sino-Science refining and chemical integration initiative, was established as a joint venture between Sinopec Corporation and Kuwaiti **Oil Company, with a 50:50 shareholding ratio. The total land area is approximately 12.26 square kilometers. It is planned to produce 15 million tons of refined oil per year and 1 million tons of ethylene per year, with a 300,000-ton crude oil terminal to be built as part of the Zhanjiang Port Donghai Island port area. § On August 10, 2009, Sinopec Group Corporation announced that the site for the Sino-foreign joint venture Guangdong refining and chemical integration project would be Donghai Island in Zhanjiang. § On March 4, 2011, it was officially approved by the **National Development and Reform Commission. § Construction began in full on December 20, 2018. § At present, construction activities are in full swing for the three main units: ethylene steam cracking, catalytic cracking, and EVA. The Meizhou Bay Petrochemical Base in Fujian relies on the development of integrated refining and chemical processing projects to strengthen industrial cooperation with nearby petrochemical enterprises. Its scope of operation has been expanded to include the Quanhuai area, as well as the Shimen’ao and Fengting chemical and new materials parks in Putian on the northern coast, thus forming the largest petrochemical industry cluster in Fujian Province. The Sinochem Quanzhou Refining and Chemical Integration Project (Phase II) has a total investment of around 32.5 billion yuan. Building on the existing 12 million tons per year refining facility that is already in operation, this project involves the construction of 13 new refining and chemical units, as well as the expansion and renovation of existing units, along with related infrastructure for storage, transportation, ports, and utility services, thereby increasing the crude oil processing capacity to 15 million tons per year. § On July 9, 2014, Sinochem Quanzhou’s 12 million tons per year oil refining project was officially completed and put into operation. § On the morning of October 30, 2017, a launching ceremony was held for the construction of the Sinochem Quanzhou Refining and Chemical Integration Project (Phase II). In the “Implementation Plan for the Construction of a New-Type Raw Materials Base in Liaoning Province,” formulated and issued by Liaoning Province, it is stipulated that world-class petrochemical industry bases will be built in Dalian and Panjin. The Huajin-APM 15 million tons per year integrated refining project includes a refinery with a capacity of 15 million tons per year, an ethylene plant with a capacity of 1.5 million tons per year, and a p-xylene plant with a capacity of 1.3 million tons per year; it is scheduled to begin trial operations in the second half of 2023. § On February 22, 2019, China North Industries Group Corporation, Saudi Aramco, and Liaoning Panjin Xincheng Group Company signed a joint venture agreement; the three parties invested together to establish a new company—Huajin Aramco Petrochemical Co., Ltd. Upon its establishment, the joint venture will be responsible for the construction and operation of the 15 million-ton integrated oil refining project by Huajin Aramco. § On March 23, 2019, the founding ceremony and unveiling event of Huajin Sino-Aramco Petrochemical Co., Ltd. were held in the Liaodong Bay New Area of Panjin City, Liaoning Province, marking a new phase in the full implementation of the key cooperation project promoted by the heads of state of China and Saudi Arabia – the Huajin Sino-Aramco Petrochemical Project. In addition, Shandong has also promoted integrated refining and chemical projects this year. This year, Shandong is pushing forward with the petrochemical integration project on Yulong Island in Yantai. The planned total production capacity for this project is 40 million tons, and companies such as Shandong Petrochemical Energy Group, Wanhua Group, and Nanshan Group will be involved in it. The project plans to obtain the approval for capacity expansion in the first half of this year, enter the preliminary design phase within the same year, start construction officially the following year, and aim to be completed and put into operation by 2022. § The funds have been secured at present, and relevant departments such as the Provincial Development and Reform Commission have also provided strong support.