Qilu Petrochemical: “Cross-sector” optimization to revitalize the entire refining and chemical industry

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Deepening supply-side structural reform is **one of the six tasks for building a modern economic system. Currently, the petrochemical industry is at a crucial point of transformation. Breaking free from the constraints of old industrial models, shifting thinking to explore new approaches, and leveraging the advantages of integrated refining and chemical production are essential measures to improve economic efficiency and market competitiveness; they are also the key factors that enable companies to enhance their quality and efficiency and achieve upgrading. At the beginning of 2017, Qilu Petrochemical focused on supply-side reform as well as improving quality and efficiency, and adopted an approach of \"cross-sector integration\" to overcome the constraints on its development. It formulated 10 optimization projects and 158 measures for improving production and operations, striving to advance the optimization of its refining and chemical processing operations. By the end of the year, Qilu Petrochemical achieved a new historical high in terms of economic performance, showing a trend of steady improvement. ????Next, let’s take a look at the measures taken by Qilu Petrochemical in terms of supply-side reform… Breaking through barriers – cross-sectoral optimization to overcome bottlenecks? Hydrocracking tail oil is a by-product of the hydrocracking units in refineries, with a monthly production volume of around 60,000 tons. In the past, aside from a portion of this tail oil being supplied as raw material for ethylene, the rest was fed into catalytic cracking units for further processing. If all of this residual oil is to be processed within the refining sector, it will be necessary to modify the facilities, which requires significant investment and a long time frame. ????Qilu Petrochemical held several special meetings to address this issue. Through discussions and evaluations carried out by various departments and specialists, and after repeated calculations of the marginal benefits, it was decided to use all the excess tail oil as raw material for the ethylene production plant. This approach not only solved the problem of excess catalytic diesel but also produced a \"chain reaction\" effect, helping to overcome the bottlenecks in production. Dynamic Optimization – Achieving Common Benefits through Comprehensive Improvement. At the beginning of September 2017, after all the hydrocracking tail oil from the refinery was supplied to the ethylene plant, it freed up capacity in the refinery’s catalytic units, thereby increasing the overall volume of refining operations and enabling the refinery to produce diesel fuel for use in vehicles. In September, Qilu Petrochemical achieved its highest monthly production level of vehicle diesel on record, contributing to an improvement in the company’s profitability. As an olefin plant in the downstream sector, significant adjustments were made to the operating mode of the cracking furnace. At the same time, they overcame difficulties such as insufficient capacity of the tail oil feed pump, overload of the condensate stripping tower, and high operational complexity, ensuring that the 4 tail oil furnaces remained online for an extended period of time. After increasing the amount of tail oil used, the overall efficiency of the ethylene plant improved significantly, resulting in cost savings of over 6 million yuan in that very month. ????This optimization also serves as a ‘pawn’ in Sinopec’s overall strategy for optimization and efficiency improvement. After increasing the amount of tail oil fed into the Qilu ethylene plant, the consumption of naphtha decreased accordingly. Lubricant Petrochemical relies on the large platform provided by Sinopec to actively organize the transportation of naphtha to sister companies in Tianjin, Central China and other areas. Against the backdrop of a positive trend in the chemical industry market, valuable raw material support was provided to affiliated companies. This initiative not only helped Qilu Petrochemical achieve efficiency improvements within its own operations, but also made significant contributions to the optimization efforts related to chemical light oils within the group company – achieving multiple benefits as a result, and it was recognized by the group company’s headquarters. Integration – Unblocking the main arteries for efficiency and productivity??? \"Pushing outward from within\" has successfully opened up new channels for jet fuel sales. On April 13, 2017, a total of 1,794 tons of aviation fuel in 32 tankers were successfully transported to Zhengzhou Airport using the \"output-driven supply\" method, marking the official establishment of this supply process by Qilu Petrochemical. This resolved the issue that had long hindered the optimization of the company’s refining and chemical processing operations, and aviation fuel supplied through this method became a new source of profit growth for the company throughout that year. ????The implementation of the “Introducing Propylene to the Refinery via Butyl Alcohol Unit” project not only helps to reduce production costs but also lowers the safety risks associated with the loading of propylene at the refinery. Starting in July 2017, the coal chemical division of Qilu Petrochemical broke the pattern of consecutive losses in recent years and achieved a profit for that month. This project played a crucial role in helping the coal chemical industry overcome its financial difficulties. Meanwhile, by replacing propylene produced in the refinery with polymer-grade propylene from plants that produce more profitable olefins, the company’s overall profitability was improved. By the end of the year, the two butyl alcohol plants combined generated an additional profit of 12 million yuan, allowing the investment cost to be recovered within just half a year. ????Solving the problem of mixed aromatic hydrocarbons clogging storage tanks, resulting in improved toluene yields. In August 2017, changes in the oil upgrading and blending plan rendered the mixed aromatics produced by the aromatic units in the olefin plants, which are used for blending gasoline, useless, forcing the continuous reforming and aromatic units to reduce their operating capacity. After repeated optimizations, the refinery adjusted its gasoline blending formula to use more mixed aromatics ； The olefin plant produces less mixed aromatics and increases the export of toluene products, which offer better profit margins. With the strong support of the Qilu Business Department of the North China Branch of the chemical sales company, as well as the Qidu Public Security Bureau, the production process for the special product toluene was finally established on September 2, resolving the issues related to blockages in the storage facilities caused by mixed aromatics, operational disruptions, and the need to reduce production capacity for aromatics. ????These individual cases are the results of Qilu Petrochemical breaking down the barriers between different plants, carrying out cross-sectoral optimization, achieving shared use of resources, and promoting the optimization of integrated refining and chemical processing. They firmly uphold the concept that production and operations are part of a unified whole, focusing on optimization and efficiency improvement throughout the entire process, ensuring that every stage serves as an essential element for such optimization. The entire company unites in thought, with all departments working in harmony; everyone contributes their efforts toward a common goal, ensuring that the main channels for generating efficiency remain unobstructed and full of vibrant energy