Investment exceeds 100 billion! Shandong Refining & Chemical, Wanhua, and Nanshan are participating! The Yantai Yulong Island refining and chemical project aims to start construction next year!

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Investment exceeds 100 billion! Shandong Refining & Chemical, Wanhua, and Nanshan are participating! The Yantai Yulong Island refining and chemical project aims to start construction next year! Petrochemical Forum: Since the beginning of this year, Shandong’s efforts to advance the construction of the Yulong Island Integrated Refining and Chemical Project in Yantai (hereinafter referred to as the Yulong Island Project) have attracted widespread public attention. During the ** period across the country, Li Xiangping, a deputy to the National People’s Congress, chairman of Shandong Dongming Petrochemical Group, and chairman of Shandong Refining & Chemical Energy Group, said in an exclusive interview with our newspaper that over the past year, Shandong Refining & Chemical Energy Group has focused its efforts on conducting research and feasibility studies for this project, with plans to complete the preliminary design this year and start construction next year. Efforts are being made to complete and put the project into operation in 2022. The **Work Report of Shandong Province** released in February this year stated, “Accelerate the development of integrated refining and petrochemical projects; make every effort to advance the preliminary work for the Yantai Yulong Island Integrated Refining and Petrochemical Project.” According to media reports, the planned total production capacity of this project is 40 million tons. Shandong Refining & Petrochemical Energy Group, Wanhua Group, Nanshan Group, and other companies will all be involved in the project. Li Xiangping explained that in 2017, Shandong Province decided to accelerate the transition from old to new growth drivers. In the refining and chemical industry, it will develop high-end petrochemicals by “phasing out smaller facilities in favor of larger ones”. After a series of inspections conducted through the Shandong Refining and Chemicals Association and the Shandong Provincial Department of Industry and Information Technology, it was decided to build the integrated refining and chemicals project in Yantai Yulong Island, with the Shandong Refining and Chemicals Energy Group taking charge of its implementation. During the interview, the reporter learned that regarding the development of the Yulong Island project, Shandong’s initial plan was to use the Wanhua Group’s brand to obtain approval from relevant authorities. However, Wanhua argued that since its core business is chemicals, it lacked sufficient expertise in the oil refining industry. After discussions among all parties involved, it was decided that Shandong Refining & Chemical Energy Group would take the lead in the project. “**Support is provided for the development of the Yulong Island project, and it has been determined that private capital should play a leading role; aside from Wanhua Group, no other state-owned enterprises have participated in this project for now. ”Li Xiangping said. It is understood that no project company has been established yet for the Yulong Island project. Li Xiangping stated that the project aims to obtain approval for its production capacity in the first half of this year; it will enter the preliminary design phase within the year. Construction is scheduled to commence next year, and it is expected to be completed within two years, with the goal of becoming operational in 2022. The necessary funds have now been secured. To promote the refining and petrochemical industry toward integration of refining processes, larger-scale facilities, cleaner production methods, higher-value products, and the development of industrial parks, in October 2017, with the support of ** in Shandong Province, Dongming Petrochemical Group took the lead in establishing the Shandong Refining and Petrochemical Energy Group, in collaboration with over 10 local refineries and investment funds backed by **. Regarding the work carried out by Shandong Refining & Chemical Energy Group last year, Li Xiangping explained that the main task was to work together with the provincial Party committee and government to conduct extensive research, planning, and feasibility studies on the Yulong Island refining and chemical integration project. By analyzing the industrial chain and comparing different technical solutions, the direction for the development of this project was determined. “At the same time, we have also done extensive work in areas such as establishing our own corporate regulations, developing and constructing the Shandong Chemical Industry Park, and securing support from financial institutions. The investment required for the Yulong Island project exceeds 100 billion yuan; it is impossible to complete this project solely with our own resources, so we need financial credit support. Currently, the necessary funds have been secured, and relevant departments such as the Provincial Development and Reform Commission have also provided strong support. ”Li Xiangping said. Once completed, the Yulong Island project will significantly help Shandong in reducing its refining and chemical production capacity. Li Xiangping told reporters that the first phase of the Yulong Island refining and chemical project is designed to have a production capacity of 20 million tons; once completed, it will become the largest refining and chemical project in Shandong Province. Based on Shandong Province’s ratio of 1:1.25 for reducing the production capacity of local refineries, the total production capacity of local refineries in the province will need to be reduced by 25 million tons. “According to the provincial plan, the reduction of local refineries’ production capacity will be carried out in three phases. First, it involves cutting the capacity of local refineries facing operational difficulties, as well as those located in urban areas or not situated within chemical industrial parks. Next, enterprises with a single-unit production capacity of less than 3 million tons will have their capacity reduced. Finally, enterprises with a single-unit capacity below 5 million tons will also see their capacity cut. ”Li Xiangping explained. Local refineries should be granted export quotas. Regarding the suggestions put forward by **, Li Xiangping said that he hopes ** will further open up the oil and gas sector and grant local refineries quotas for exporting refined oil products. Li Xiangping told reporters that previously, **the relaxation of regulations regarding qualifications for importing crude oil allowed private refining enterprises to develop rapidly. However, these local refining firms still face a policy “ceiling.” To date, no private refining enterprise has been granted policies supporting the export of refined petroleum products, resulting in a structural oversupply of products within the refining industry.** “Currently, China’s total actual oil refining capacity is 787 million tons. The capacity of local refineries amounts to 230 million tons, accounting for 29.22% of the total. Local refineries now possess favorable conditions for exporting refined oil products; thus, developing overseas markets for such products is one of the key ways to enhance the competitiveness of China’s refining industry. ”Li Xiangping said. Therefore, Li Xiangping suggests that export quotas for refined oil should be granted to private refining and chemical enterprises as soon as possible, allowing them to engage in refined oil exports. This would help to make full use of existing production capacity, effectively alleviate the surplus supply pressure in the domestic refined oil market, and accelerate the structural reform on the supply side of China’s petrochemical industry as well as the transition to new forms of energy production. Additionally, Li Xiangping put forward suggestions regarding tax reform, proposing that a revenue-sharing mechanism between the central and local governments be implemented for the consumption tax on refined oil products, so as to enhance local governments’ enthusiasm for regulating this tax. “This not only helps to increase local fiscal revenue, but also facilitates the collection of all due taxes, thereby boosting central government revenue. Additionally, it helps to regulate the tax-paying behavior of taxpayers and foster a sense of voluntary tax compliance. ”Li Xiangping said. (Source: Luwang)