Transformation and Upgrading of the Refining and Chemical Industry in Dongying (Plan)

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Transformation and Upgrading of the Refining and Chemical Industry in Dongying (Planning)
Information source: China Chemical Industry News
Quality over quantity; only high-end projects should be pursued. Recently, the Dongying Port Economic Development Zone held an investment promotion event in Shanghai, during which it released the “Key Areas for the Development of the High-End Petrochemical Industry and Investment Promotion Plan for the Dongying Port Economic Development Zone” (hereinafter referred to as the “Plan”). Thus, the approach for developing a high-end petrochemical industry base in this area was determined: using the crude oil processing capacity of existing local refineries as the \"starting point,\" and adding new large-scale projects to develop the \"midstream and downstream sections,\" in order to accelerate the creation of an industrial chain that goes from the starting point through the midstream to the downstream stages. At the same time, adhering to the principle of \"preferring quality over quantity and aiming for high-end development,\" efforts are made to attract investment by targeting large-scale integrated refining and chemical production facilities, as well as projects related to ethylene, propylene, aromatics, and butane derivatives. By bringing in key projects, these industrial chains are continuously improved, with the goal of creating a high-end petrochemical industry base with international influence. The high-end petrochemical base serves as the core; the petrochemical industry accounts for half of Dongying’s industrial output. Building a high-end petrochemical base in northern Shandong is a major decision made by the Shandong Provincial Party Committee and the provincial government, while developing this core area is considered the ‘top priority project’ for Dongying’s transition to new forms of economic development. On March 6, Li Kuanduan, a deputy to the National People’s Congress and secretary of the Dongying Municipal Party Committee, said that Shandong Province’s plan to develop a high-end petrochemical industry base in northern Shandong presents an important opportunity for Dongying to transform its existing industrial capabilities and foster new ones, while also placing significant responsibilities on Dongying. Li Kuanduan noted that today, Dongying has become one of the regions in China with the highest concentration of the petrochemical industry. The city’s crude oil processing capacity stands at 72.2 million tons per year, accounting for 36% of Shandong Province’s total and 10% of the national total. The \"Development Plan for the High-End Petrochemical Industry Base in Northern Shandong Province\" specifies that Dongying’s role is to serve as an integrated refining and chemical processing area. By leveraging its advantages in terms of ports and the existing petrochemical industry infrastructure, it is intended to develop integrated refining and chemical processing projects with a capacity of ten million tons, in line with international top-tier standards. On November 21, 2018, Dongying City ** issued the \"Implementation Plan for the Major Project on Transforming Old and New Economic Drivers in Dongying City.\" This plan emphasizes the development of a high-end petrochemical industry base, aims to expand and optimize industrial chains focused on the comprehensive utilization of aromatics and olefins as well as new chemical materials, and seeks to improve the supporting infrastructure related to ports, networks, and industrial zones. It promotes integrated development within port areas and cluster-based growth, with the goal of becoming a key force in the province’s efforts to develop high-end chemicals and build a high-end petrochemical industry base in northern Shandong. In accordance with the latest arrangements in Dongying City, the Dongying Port Economic Development Zone, which has been recognized at the provincial level, will develop in coordination with the Hekou Blue Economy Industrial Park and the Lijin Coastal New Area. In line with the overall strategy of \"integration of port areas and a trinity approach,\" the three areas complement each other’s strengths, enhance and complete industrial chains, and develop in a differentiated manner. As a result, the industrial layout is more rational, and there is greater potential for development within these parks. Thanks to its location in the heart of oil fields and access to port resources, the Dongying Port Economic Development Zone is held in high regard. Yang Tongxian, director of the Management Committee of Dongying Port Economic Development Zone, said that in line with the goal of establishing a first-class domestic demonstration base for a green, circular, high-end petrochemical industry, the zone adheres to planning guidance and accelerates the implementation of a number of major projects. While optimizing the traditional petrochemical industry, it focuses on developing new chemical materials and high-end chemicals, thereby creating a high-end chemical industry cluster with a wide range of products and a leading scale. “According to the information indicating the clear direction for diversified development, the Dongying Port Economic Development Zone currently has 4 petrochemical enterprises, namely Wanda Tianhong, United Petrochemical, Yatong Petrochemical, and Haikereilin. According to the plan, the region encourages refining and chemical enterprises to carry out upgrades and renovations, by installing new units for distillate hydrogenation, wax oil/heavy oil hydrocracking, naphtha hydrogenation, and heavy naphtha hydrocracking. By 2020, the regional processing capacity is set to reach 20 million tons, providing a solid supply of raw materials for continuous reforming and combined aromatics production. It supports United Petrochemicals in expanding its crude oil processing capacity, raising the region’s total primary processing capacity to 25 million tons. In line with the provincial plan for the refining and chemical industry, which aims to consolidate large-scale operations while phasing out smaller ones, efforts will be made to collaborate with central state-owned enterprises as well as top 500 global chemical companies in order to introduce large-scale integrated refining and chemical projects with a capacity of over 15 million tons at an appropriate time. On this basis, the comprehensive utilization of ethylene and aromatic hydrocarbon raw materials is coordinated in accordance with the principle of \"using ethylene where appropriate and using aromatics where appropriate.\" Building an aromatic hydrocarbon industry chain based on the Dongying Weilian Aromatic Hydrocarbons project: First, using p-xylene as a raw material, projects for the production of purified terephthalic acid are developed, with further expansion into products such as polyethylene terephthalate; second, benzene gives rise to four separate product lines: adipic acid, phenol/cresol, caprolactam, and styrene. Leveraging Mingyu Chemical’s 1.2 million tons/year ethylene project and Shandong Dongrun’s 300,000 tons/year MTO project, we aim to develop an ethylene industry chain focused on specialty fine chemicals, as well as a propylene industry chain centered on high-value-added polymers. At the same time, efforts are being made to actively develop the tetraolefin industry chain with high-end synthetic rubber as a key focus. To build an industrial chain that features a \"strong start and a refined end,\" it is first necessary to strengthen the \"start.\" Currently, a competition to upgrade technologies, modernize facilities, and improve quality is in full swing among the refining and chemical enterprises in the area. Wanda Tianhong has invested 500 million yuan in technological upgrades, while Haikelerin has invested 150 million yuan for such improvements… These technological upgrades will provide strong impetus for enhancing the quality of refined oil products in the park. Key projects provide support. On February 12, the Dongying Port Economic Development Zone held a meeting to launch the “Project Acceleration Year” initiative, focusing on advancing projects such as Weilian Chemical’s 2 million tons per year p-xylene production facility, Tianhong Chemical’s 450,000 tons per year propane dehydrogenation plant, and Qiheng New Materials’ 330,000 tons per year polymer materials production facility. The prominent aromatic compounds project of Dongying Weilian Chemical Co., Ltd. is considered the \"top project\" for the upgrading of Dongying’s petrochemical industry, and it has been included in this year’s work report of Shandong Province. According to the information published by the Dongying Environmental Protection Bureau, the project is located in the Dongying Port High-End Petrochemical and New Materials Industrial Park. With a total investment of 11.4 billion yuan, its main construction components include 2×2.2 million tons per year of continuous reforming units, 2×700,000 tons per year of aromatic extraction units, 2×1 million tons per year of PX production units, as well as related supporting facilities. Once completed, it will enable an annual production capacity of 2 million tons of PX, 560,000 tons of benzene, and 120,000 tons of heavy aromatics. Zhejiang Hengyi Group’s 1.2 million tons per year high-quality caprolactam–polyamide integrated project is a key investment attraction in the Dongying Port Economic Development Zone; as a supporting project, Yatong Petrochemical’s 1.2 million tons per year continuous reforming and hydrocracking facility can supply raw materials to it on-site. Mingyu Chemical’s 1.2 million tons per year ethylene production project will, together with companies such as Tianhong and Weite, form a complete industrial chain that connects crude oil refining in the petrochemical industry with high-end chemical manufacturing, thereby making full use of crude oil. All levels of government in the Dongying urban area regard the implementation of major projects as a top priority in ensuring things get done. “The p-xylene project should start construction as soon as possible; efforts should be made to enable the caprolactam project to meet the conditions for construction at an early date; and ongoing follow-up work should be carried out for the ethylene project. ”Guo Shunxian, director of the Dongying Development and Reform Commission, said. In addition, the environmental impact assessment notices have been issued for projects aimed at improving the \"one source, multiple outputs\" industrial chain: Yatong Petrochemical’s 1.2 million tons per year naphtha comprehensive utilization project, Korur Chemical’s 260,000 tons per year acrylonitrile project, and Qiheng New Materials’ 330,000 tons per year polymer new materials project. These projects are currently in the process of approval and preliminary preparation. According to the plan, by 2020, the port area will develop an industrial system based on the integration of oil refining, ethylene production, and aromatic compounds, supplemented by the processing of various raw materials. The scale of these core industries is expected to reach 30 million tons per year for oil refining, 2 million tons per year for olefins, and 2 million tons per year for aromatic compounds, enabling the area to rank among the top eight chemical parks in the country in terms of overall strength. By 2025, a high-end, clean industrial system will be established, centered on clean energy, organic raw materials, and synthetic materials, with specialty chemicals and fine chemicals as its distinguishing features. Five major industrial clusters for new chemical materials such as polyolefin resins, polycarbonates, caprolactam, nylon 66, and PET will be developed, creating world-class bases for the chemical and new material industries that will rank among the top five in China’s chemical parks.