Shandong Dongying invests 31.8 billion yuan to build a new oil refining and petrochemical complex with an annual capacity of 15 million tons
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Shandong Dongying is investing 31.8 billion yuan to build a new oil refining and petrochemical complex with an annual capacity of 15 million tons. On the 6th, the website of the Dongying Port Economic Development Zone published information regarding the public participation process in the risk assessment report for the \"Low-carbon reconstruction and comprehensive utilization of aromatic raw materials\" project carried out by Fuhai (Dongying) Petrochemical Technology Co., Ltd. The project will involve the construction of new facilities with a crude oil processing capacity of 15 million tons per year. These include a new atmospheric and vacuum distillation unit with a capacity of 15 million tons per year (including light hydrocarbon recovery), a slurry-bed residue hydrocracking unit with a capacity of 3 million tons per year, a wax oil hydrogenation unit with a capacity of 2.2 million tons per year, a wax oil catalytic cracking unit with a capacity of 2 million tons per year, a catalytic gasoline hydrogenation unit with a capacity of 1 million tons per year, a unit for refining catalytic products with a capacity of 600,000 tons per year, a unit for separating catalytic LPG with a capacity of 500,000 tons per year, a continuous reforming unit with a capacity of 2.2 million tons per year, an extraction and aromatic separation unit with a capacity of 2 million tons per year, a diesel hydrogenation unit with a capacity of 2 million tons per year, a diesel hydrocracking unit with a capacity of 3 million tons per year, a wax oil hydrocracking unit with a capacity of 2.6 million tons per year, an MTBE production unit with a capacity of 100,000 tons per year, an alkylation unit with a capacity of 200,000 tons per year, 4 units for sulfur recovery each with a capacity of 100,000 tons per year, No. 1 and No. 2 PSA units with a capacity of 100,000 standard cubic meters per hour each, a POX unit with a capacity of 2 million tons per year, a PPC unit with a capacity of 120,000 tons per year, a jet fuel hydrogenation unit with a capacity of 1.2 million tons per year, a C3C4 separation unit with a capacity of 800,000 tons per year, and a butanol production unit with a capacity of 200,000 tons per year. In addition, there will be 22 other process units, along with the associated utility systems and auxiliary facilities. The project is planned to be built within the Dongying Port Chemical Industry Park, covering a total area of approximately 271.9 hectares, which is equivalent to 4,078.5 mu. The total investment for the project is 3,179,996 million yuan (excluding taxes). Fuhai (Dongying) Petrochemical Technology Co., Ltd. was established on December 27, 2023, and is 100% owned by Fuhai Group New Energy Holding Co., Ltd. (abbreviated as Fuhai Holding). Fuhai Holdings is a large-scale energy and chemical enterprise that integrates petrochemicals, coal chemicals, new chemical materials, clean energy, logistics and distribution, retail sales, and real estate services. It currently has a crude oil processing capacity of 10 million tons per year, operates over 700 oil and gas stations of its own, through partnerships, or in collaboration with others, and has more than 2,000 vehicles for transporting hazardous materials, with an annual transportation capacity of 20 million tons.
Integration of local refineries in Shandong: As is well known, within the ecosystem of China’s local refining industry, Shandong’s local refineries represent a unique segment. For a long time, Shandong has remained China’s largest oil refining province, with an annual refining capacity of 210 million tons, accounting for about 28% of the country’s total crude oil processing capacity. Of this amount, the refining capacity of local refineries is 130 million tons per year, representing over 60% of Shandong Province’s total refining capacity as well as over 70% of the country’s total refining capacity from local refineries. The refining capacity of local refineries in Shandong Province is generally small; 60% of these refineries have a processing capacity of less than 3 million tons per year, while only about 20% have a processing capacity of 5 million tons per year or more. Starting in 2015, Shandong Province phased out outdated production capacities and reduced and restructured such capacities in two stages. After two rounds of consolidation, the number of local refining enterprises in Shandong Province dropped to less than 40, with an average capacity of 3.5 million tons per year. Among them, 15 companies have a production capacity of 5 million tons per year or more, further increasing the industry concentration. According to the Shandong Province Chemical Industry Development Plan for the 14th Five-Year Period, until 2025, existing high-quality enterprises will continue to play a leading role in driving integration and restructuring; strict compliance with capacity replacement ratios will be ensured, so as to ensure that oil refining capacity does not increase but only decreases. By 2025, the refining capacity of refineries with a capacity of 5 million tons or less is to be integrated and transferred in phases, thereby reducing the province’s overall crude oil processing capacity from the current 130 million tons per year to around 90 million tons per year. The yield of refined products (gasoline, diesel, kerosene) is to drop to around 40%. ” Against this backdrop, it is imperative to uncover the underlying reasons behind Fuhai (Dongying) Petrochemical Technology’s sudden decision to invest 31.8 billion yuan in building a new refining and chemical processing facility with an annual capacity of 15 million tons!