Gain a comprehensive understanding of the seven world-class integrated refining and chemical complexes and their representative projects!

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1. First, what is \"refining and chemical integration\"? Integrated refining refers to an integrated production model that combines oil refining with the cracking of naphtha to produce chemicals. The next generation of integrated refining and chemical processing facilities will achieve further improvements in efficiency, cost reduction, and safety through the optimized combination of advanced refining units with technologies such as coal-based hydrogen production, ethylene production via naphtha cracking, MTO, and ethylene production via ethane cracking, thereby enhancing competitiveness. The integration of refining and chemical processing is a major trend in the development of refining and chemical enterprises worldwide. PX (p-xylene) plants are downstream facilities within refining and chemical complexes; they supply raw materials for downstream chemical plants. Their construction is beneficial for increasing the added value of products and addressing the significant shortage of basic chemical raw materials in the country. 2. Secondly, why is it necessary to implement \"integration of refining and chemical processing\"? Initiating industrial upgrading through integrated refining and chemical production was the main focus of China’s petrochemical industry during the 13th Five-Year Plan period. In 2016, the State Council promoted a \"supply-side reform\": investing in the construction of high-standard petrochemical projects to supply high-quality refined petroleum products as well as mid-to-high-end chemical products demanded by the market, thereby facilitating industrial upgrading – this was an important aspect of the supply-side reform in the petrochemical industry. “During the 13th Five-Year Plan period, the **National Development and Reform Commission focused on planning the development of seven major petrochemical industry bases. During the period 2016–2020, **capacity that is technologically outdated, not economically viable, or fails to meet environmental standards will be phased out, while efforts will be made to advance world-class integrated refining and chemical projects in the seven major petrochemical industry hubs.** 3. An analysis of the seven major petrochemical bases from an international and domestic perspective: By 2014, China had 28 refining facilities with a capacity of 10 million tons each, as well as 16 ethylene production facilities with a capacity of 1 million tons each. In the western region, 3 refining plants with a capacity of 10 million tons each and 2 ethylene production facilities with a capacity of 1 million tons each have been built. The refining and ethylene production capacities amount to 30.5 million tons per year and 2 million tons per year respectively, accounting for 4.1% and 11.1% of the national total capacities. The three major petrochemical clusters in the Yangtze River Delta, the Pan-Pearl River Delta, and the Bohai Sea region have taken initial shape; the capacity of oil refining bases with a capacity of tens of millions of tons accounts for 11.1%, 13.4%, and 8.5% respectively, totaling 33.0% ； The capacity of ethylene plants with a production capacity of millions of tons accounts for 25.8%, 22.3%, and 11.1% respectively, for a total of 59.2%. According to available data, there are 240 oil refining enterprises nationwide; oil refineries exist in all provinces and municipalities except Tibet, Guizhou, Yunnan, Shanxi, and Chongqing, with an average capacity of 3.08 million tons. In contrast, the average size of global refining companies is 7.42 million tons. The major petrochemical countries in the world develop their petrochemical industries through an integrated development model: for example, 44% of the U.S. refining capacity and 95% of its ethylene production capacity are concentrated in the Gulf Coast region ； 85% of Japan’s refining capacity and 89% of its ethylene production capacity are located along the Pacific coast. The refining capacity of large-scale petrochemical complexes around the world is generally above 40 million tons. From a European perspective, the refinery capacity in Rotterdam, the Netherlands, is 50 million tons per year, while the ethylene production capacity is 3 million tons per year ； The petrochemical complex in Antwerp, Belgium, has a refining capacity of 37 million tons per year and an ethylene production capacity of 2.5 million tons per year. In the Asian region, Ulsan in South Korea has an oil refining capacity of 42 million tons per year, an ethylene production capacity of 3.4 million tons per year, and a p-xylene (PX) production capacity of 1 million tons per year ； Yulon in Singapore reached 63 million tons per year, 3.87 million tons per year, and 870,000 tons per year, respectively. Although the large-scale production bases in China’s ethylene industry are relatively concentrated – for example, Shanghai has an ethylene production facility with a capacity of 2 million tons, while the Hangzhou Bay area boasts a total oil refining capacity of 50 million tons and an ethylene production capacity of 3 million tons; Dalian, on its part, has an oil refining capacity of 30 million tons – there is still a significant gap compared to the advanced development patterns of the petrochemical industry in other countries, in terms of the overall scale and centralized layout of China’s refining and petrochemical industries. In particular, the refining industry has a low degree of integration; the average size of refining enterprises across the country is quite small, resulting in a pattern of \"many, small, scattered, and chaotic\" enterprises. **The fundamental purpose of formulating and implementing the \"Petroleum and Chemical Industry Planning and Layout Plan\" is to completely reverse the scattered distribution of major petroleum and chemical projects in our country. By taking into account factors such as the level of economic development, the existing industrial foundation, regional and environmental capacity, safety protection measures, And port transportation conditions, efforts are being made to develop seven world-class petroleum and chemical hubs: Caojing in Shanghai, Ningbo in Zhejiang, Huizhou in Guangdong, Gulei in Fujian, Changxing Island in Dalian, Caofeidian in Hebei, and Lianyungang in Jiangsu. In the future, new large-scale refining and chemical projects will, in principle, be prioritized for development in the seven major bases. All seven bases are located in key coastal development areas, targeting the existing three major petrochemical clusters, while also being situated along important routes for the import of marine energy resources. The three bases in Caojing, Shanghai; Ningbo, Zhejiang; and Lianyungang, Jiangsu are located in the Yangtze River Delta region, which boasts strong economic vitality and great development potential. It serves as a consumption hub for downstream petrochemical products, and is also a key intersection point for implementing the two strategies of the \"Belt and Road\" initiative and the Yangtze River Economic Belt. The two major bases in Huizhou, Guangdong, and Gulei, Fujian are located in the Pan-Pearl River Delta region and face Hong Kong, Macao, and Taiwan; they enjoy a unique geographical location and serve as the core areas for implementing the \"Belt and Road\" strategy. The two major bases in Dalian’s Changxing Island and Hebei’s Caofeidian are located in the Bohai Sea region, and they serve as key areas for implementing the coordinated development strategy for the Beijing-Tianjin-Hebei area. Based on the overall conditions of the existing bases, it is expected that around 2020, the Ningbo and Shanghai bases in the Yangtze River Delta region will be the first to reach a capacity of 40 million tons for oil refining, as well as 2–3 million tons for ethylene and aromatics production ； The Huizhou facility in the Pearl River Delta region is also expected to reach a similar scale through accelerated development. Meanwhile, Shanghai Gaqiao Petrochemical will relocate to the Caojing facility in Shanghai, Nanjing Jinling Petrochemical will move to Lianyungang, while the 30 million tons per year oil refining capacity in the Dalian area should be gradually concentrated at the Changxing Island facility. Caofeidian, which is located in the Bohai Rim region alongside Changxing Island, will actively adapt to the coordinated development strategy of Beijing, Tianjin, and Hebei, and gradually achieve clustered development of the petrochemical industry. In addition, located at the intersection of the Belt and Road Initiative and the Yangtze River Economic Belt, Zhoushan New Area will take advantage of its island terrain and shipping capabilities to serve as an expansion area for the Ningbo base. It will focus on competing in the international market, relying on private capital to develop a petrochemical industry centered on chemical fiber raw materials. It is estimated that by around 2025, the oil refining capacity in the Hangzhou Bay area will exceed 100 million tons, while the production capacity of ethylene and aromatics will both be over 6 million tons, making it a distinct global petrochemical industry cluster. With the successful implementation of the \"Petroleum and Chemical Industry Planning Scheme,\" it is estimated that by 2020 China’s overall refining capacity will be 790 million tons per year, while the production capacities for ethylene and aromatics will be 33.5 million tons per year and 30.65 million tons per year, respectively ； By 2025, the production capacities for refining, ethylene, and aromatics will be 850 million tons per year, 50 million tons per year, and 40 million tons per year, respectively. By then, the refining, ethylene, and aromatic production capacities of these seven major bases will account for 40%, 50%, and 60% of the country’s total capacities respectively. This will significantly increase the concentration of China’s petrochemical industry, enable a scaled-up and centralized layout, enhance the international competitiveness and risk resistance of enterprises and the industry as a whole, and help the petrochemical industry evolve from being large in scale to being strong in quality. It will also facilitate improvements in efficiency and quality, as well as transformation and upgrading of the industry. 4. Introduction to Representative Projects of the Seven Major Petrochemical Bases Serial Number Representative Project of the Base 1 Dalian Changxing Island (Xizhong Island): CNPC’s integrated refining and chemical processing project. The first phase of this project includes a refinery capable of processing 15 million tons per year of Russian crude oil, along with associated chemical processing facilities; it came online officially after Russia and China agreed in January 2018 to supply additional Russian crude oil to China ； Phase 2 will take another 3-4 years to build a second refining unit, so that by 2022, a refining capacity of 25 million tons per year or more will be established in Nishinakajima. 2. Sinopec Gaqiao Petrochemical Caojing Integrated Refining and Chemical Project in Shanghai: 20 million tons per year of refining capacity (15 million tons per year for refining + 5 million tons per year for lubricant production), along with 1 million tons per year of ethylene and related downstream processing facilities. 3. CNOOC Huizhou Refining and Chemical Project Phase II in Guangdong: Building on the Phase I facility with a refining capacity of 12 million tons per year, this phase adds another 10 million tons per year of refining capacity and 1 million tons per year of ethylene production capacity. 4. Sinopec Gulei Integrated Refining and Chemical Project in Fujian: 16 million tons per year of refining capacity, 1.2 million tons per year of ethylene production, plus 27 other chemical processing units. 5. Sinopec Caofeidian Mega-ton Refining Project in Hebei. 6. Sinopec Lianyungang Integrated Refining and Chemical Project in Jiangsu: The project is developed in two phases, with an overall refining and chemical processing capacity of 32 million tons per year; Phase I includes a refining capacity of 12 million tons per year, while Phase II expands this capacity by another 20 million tons per year. 7. Sinopec Zhenhai Integrated Refining and Chemical Project in Ningbo, Zhejiang: An expansion project that increases the refining capacity to 15 million tons per year and the ethylene production capacity to 1.2 million tons per year