The output value of the petrochemical industry is expected to reach 140 billion by 2025! Yangpu is building a green ecological petrochemical industry base!

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Oil is closely related to people’s lives; everyone’s needs for clothing, food, shelter, and transportation depend on the downstream products derived from oil production. In July this year, the \"14th Five-Year Plan for the Development of High-Tech Industries in Hainan Province\" was issued, which calls for accelerating the development of petrochemical new materials as a strategic emerging industry, extending the petrochemical industry chain, and establishing an integrated development model that includes upstream exploration and production, midstream oil and gas processing and comprehensive utilization, and downstream new materials production. As an important platform for the petrochemical industry in Hainan, the development of Yangpu Economic Development Zone is of great significance. The provincial Party committee and government require that Yangpu should strengthen the expansion and integration of the petrochemical industry chain, so that the upstream products manufactured in the park can be consumed locally. This will help advance the oil and gas industry toward more advanced stages, as well as toward lower emission levels, thereby achieving high-quality development across the entire industry chain. To this end, Yangpu makes full use of upstream resources in the oil and gas industry as well as the policy advantages of the Hainan Free Trade Port. It is planning to develop a petrochemical new materials industrial park. The park focuses on targeted investment promotion for projects involving petrochemical new materials such as biodegradable plastics, modified materials, high-performance synthetic resins, special engineering plastics, and specialty fluids. By strengthening and extending the industrial chain, with parallel development in the refining, olefins, and aromatics sectors, Yangpu aims to make full utilization of every drop of oil and maximize overall economic benefits. It is expected that by 2025, the output value of Yangpu’s petrochemical industry will reach 140 billion yuan, making it a leading domestic and world-class green ecological petrochemical industry hub. The processing stage, from crude oil to finished products, is not limited to the five main types of products; not a single drop of residue oil is wasted. Sinopec Hainan Refining & Chemical Co., Ltd. (abbreviated as Hainan Refining & Chemical) is the largest refining enterprise in our province, with an annual refining capacity of 9.6 million tons. Entering the main control room of Hainan Refining and Chemical Center, a large screen on the wall displays the operations taking place throughout the refinery complex and at the docks. In the center of the control room, several staff members are watching the continuously updating data to monitor the production status. “How much material needs to be arranged, what level of production capacity is required, and what the output volume should be – all these instructions are issued from here. ”Yu Changjiang, deputy manager of the General Scheduling Department, said. After the oil tanker berths at the port with its crude oil on board, the oil is transported via pipelines to the crude oil tanks in the refinery, where it is left to stand for 24 hours to remove water. It then enters the atmospheric pressure units, and through various production lines, different products are produced. “The atmospheric pressure plants have multiple production lines for liquefied gas, naphtha, light crude oil, medium crude oil, and heavy crude oil. ”Yu Changjiang pointed to the schematic diagram of the plant’s material balance on the computer screen and explained to the reporters from Hainan Daily that the liquefied gas production line manufactures liquefied gas for domestic use. After processing, naphtha can be used to produce aromatics and residue oil. The First Normal pressure production line is mainly used to produce aviation kerosene, while the Second and Third Normal pressure production lines are primarily used to produce diesel. “After being processed by the aforementioned production line, the crude oil is also almost completely extracted; the remaining residue oil then enters a vacuum distillation unit for further extraction. ”Yu Changjiang explained that after entering the vacuum distillation unit, residue also undergoes various processing procedures. For example, through hydrogenation treatment, naphtha and diesel can be produced; the remaining residue is sent to a catalytic cracking unit where it can be processed to yield high-quality products such as liquefied gas, gasoline, and diesel. By now, the crude oil has essentially been exhausted. “Generally speaking, crude oil is primarily used to produce five main types of products: gasoline, diesel, jet fuel, naphtha, and liquefied gas. ”Yu Changjiang said that 1 ton of crude oil can produce approximately 0.8 tons of high-quality gasoline, diesel, aviation kerosene, naphtha, and liquefied gas. Together with other products manufactured, Hainan Refining’s overall product yield reaches 92%, placing it among the highest in Sinopec’s network. At the same time, Hainan Refining & Chemicals has achieved high output and low emissions, accounting for 70% of the output value in the Yangpu industrial park and 10% of the total environmental emission capacity there. Through various environmental protection initiatives, environmental protection systems such as oil and gas recovery systems for tank areas have been built and put into operation. Grid-based automatic monitoring is implemented for all key production units and facilities, resulting in ultra-low emissions of sulfur dioxide, nitrogen oxides, COD (chemical oxygen demand), and ammonia nitrogen; some of these emission levels are merely one-tenth of the standard values. Among the downstream enterprises of Hainan Refining & Chemical, Hainan Handi Sunshine Petrochemical Co., Ltd. (hereinafter referred to as Handi Sunshine) uses organic heat carriers provided by Hainan Refining & Chemical to produce lubricants; Hainan Kaimite Gas Co., Ltd. purifies the hydrogen-rich gas generated during the refining process at Hainan Refining & Chemical, extracting high-purity hydrogen for reuse by the same company. Aromatics form the backbone of the chemical industry, and p-xylene is one of the most widely used aromatic compounds. It is primarily used in the production of terephthalic acid (PTA), which in turn is used to manufacture polyester (PET). PET is the most commonly used polymer for fiber production, and it is utilized in making fibers, films, and other materials. In addition to the refining units, Hainan Refining & Chemicals currently has two aromatic production units with a designed annual output of 1.6 million tons, and the raw material for these units is the naphtha produced by the same plant. Hainan Yisheng Petrochemical Co., Ltd. (hereinafter referred to as Yisheng Petrochemical) is an enterprise that followed in the footsteps of Hainan Refining & Chemical Co., Ltd. and set up operations in Yangpu; it has now invested in building PTA and PET production lines. At present, the company has the capacity to produce 2.1 million tons of PTA and 2 million tons of PET per year, with an output value of over 18 billion yuan in 2020. Thus, Yangpu’s aromatic hydrocarbons industry has taken shape. In terms of layout, efforts are made to strengthen the foundation of the petrochemical industry from upstream to downstream, in order to accelerate the development of an industry structure that starts with oil and ends with chemical products. Ethylene is known as the \"mother of the petrochemical industry\"; it is one of the most widely produced chemical products in the world and holds an important role in the national economy. To strengthen the foundation of the petrochemical industry, Yangpu is accelerating the development of an industrial layout that focuses on oil processing at the beginning and chemical production at the end. In December 2018, the construction of Hainan Refining & Chemical’s 1 million-ton ethylene and refining expansion project commenced; it is expected to be completed and put into operation by 2022. This project will drive the development of downstream industries worth over 100 billion yuan, serving as a new \"engine\" for Hainan’s future growth. At the beginning of this year, Yisheng Petrochemical expanded its industrial footprint by launching the construction of Phase II of its projects. The main components of this construction include production facilities capable of producing 2.5 million tons of PTA and 1.8 million tons of PET per year, with a total investment of 8 billion yuan. “Once the entire second-phase project is completed and put into operation, it will further increase the added value of Yangpu’s petrochemical products, helping Yangpu to develop a complete petrochemical industry chain. ”said Li Shifeng, manager of the Administration Department at Yisheng Petrochemical. The project for producing 1.5 million tons of specialty oils by Handi Sunshine, as well as 150,000 tons of pharmaceutical and food-grade white oil per year, has been completed. “The commissioning of the production equipment is currently in progress, with production expected to begin in the third quarter of this year. ”Wu Hanling, chairman of Handi Group, said that the company has currently entered into a partnership with Wuchan Zhongda Chemical Group. Together, they will make full use of the preferential policies available for the construction of Yangpu as a pilot zone and demonstration area for Hainan’s free trade port, to carry out business models such as those involving sourcing materials from around the world and selling products globally, thereby achieving the strategic goal of purchasing raw materials globally and selling products worldwide. Established companies continue to expand their production capacity and strengthen their capabilities, while newly established projects are also building up momentum for development, aiming to be completed and put into operation as soon as possible in order to take advantage of the policies offered by the free trade port. At the Petrochemical New Materials Industrial Park on Jiayang Road in Yangpu, the construction site for the project to produce 100,000 tons per year of PBAT-based biodegradable resins by Zhongke Qicheng is in progress, with several excavators carrying out earth-moving work. Meanwhile, the adjacent Dongfang Yuhong Yangpu New Materials project is being accelerated in construction; the steel structure workshops and warehouses are nearly completed, and workers are installing production equipment, with operation expected to begin this month. Zhongke Qicheng PBAT and Dongfang Yuhong Yangpu New Materials are among the first projects to settle in the Yangpu Petrochemical New Materials Industrial Park. As a downstream product of the petrochemical industry, Zhongke Qicheng PBAT is a raw material used in the production of biodegradable plastics; the modified asphalt waterproofing membranes and waterproof coatings produced by Dongfang Yuhong’s Yangpu project are all new types of eco-friendly building materials. “Hainan implemented a complete ban on plastic use at the end of last year, and with the support of its free-trade port policies, this represents the best time for us to invest and do business there. ”Wu Ruzhou, general manager of Zhongke Qicheng (Hainan) Biotechnology Co., Ltd., said that the project has an annual production capacity of 100,000 tons of PBAT; the second phase will enable an annual production of 400,000 tons, bringing the total capacity of the project to 500,000 tons. This will help drive the transformation and upgrading of the biodegradable plastics industry in Hainan. “By September next year, once the ethylene project comes online, a petrochemical industry with three parallel sectors—refining, olefins, and aromatics—in Yangpu will be fully established. ”Liang Changkun, senior manager of Yangpu International Energy and Chemicals Division, said that in terms of oil refining, in addition to Hainan Refining & Chemicals having a refining capacity of 9.6 million tons and Huizhi Petrochemicals having the capability to produce 300,000 tons per year of industrial isooctane and other related oils, Handi Sunshine has a production capacity of 230,000 tons per year for special oils. The company’s project to produce 1.5 million tons per year of special oils as well as 150,000 tons per year of pharmaceutical and food-grade white oils is currently under commissioning and is set to go into operation soon. Olefins are a key focus of Yangpu’s petrochemical industry. In addition to Hainan Refining & Chemical’s existing production capacity of 200,000 tons per year of polypropylene, a project to produce 1 million tons of ethylene is currently under construction. Other projects such as Baling Petrochemical’s production of 170,000 tons per year of thermoplastic elastomers, Zhongke Qicheng’s production of 100,000 tons per year of PBAT, Huiheng New Materials’ production of 150,000 tons per year of ethylene tar, and Aoke Chemical’s production of 200,000 tons per year of ethylene oxide have also been launched one after another. “In addition to the projects mentioned above, other projects have also been signed and put into operation, including Yizheng Chemical Fibers’ annual production of 60,000 tons of PBST, Xingguang Chemical’s annual production of 600,000 tons of methanol tetrahydrocarbons, and Henghe New Materials’ annual production of 120,000 tons of pentacarbon compounds as well as 100,000 tons of nonane compounds through separation and hydrogenation processes, along with related downstream facilities. ”Liang Changkun revealed that preliminary work is underway on these projects, and construction can begin once all the necessary procedures are completed. By then, the Yangpu Petrochemical Zone will have hundreds of petrochemical production units, thus forming a relatively complete petrochemical industry chain. According to Liao Zhiwen, director of the Yangpu Petrochemical Office, there are currently 12 petrochemical new material projects under negotiation, of which 8 are those being handled by the Petrochemical Office. Once these projects are finalized and implemented, the total investment will exceed 40 billion yuan. The range of downstream products in Yangpu’s petrochemical industry will become more diverse, which will help lay a solid foundation for the high-quality development of Yangpu. In the future, by building up the supply chain and strengthening it, it will be possible to achieve scale and resource advantages, as well as enhance technological innovation capabilities and overall competitiveness. Petrochemical new materials are important foundational materials for strategic emerging industries such as new energy, high-end equipment, environmental protection, and aerospace. Compared with traditional materials, they offer better performance, higher added value, greater technical complexity, and a wider range of application areas. What are the shortcomings in Yangpu’s development in the field of new petrochemical materials? In which areas does it need to make efforts? \"At present, the shortcomings of Yangpu’s petrochemical industry are quite evident: there are not many enterprises operating in this sector, the relevant industrial chains have not yet been fully established, and a robust industrial ecosystem has not taken shape.\" ”Li Shijie, director of the Hainan Open Economy Research Institute, said that a shortage of talent is also one of the factors restricting the development of the petrochemical industry in Yangpu; the existing talent pool is not sufficient to meet the needs of this industry’s growth. Although Yangpu has developed a talent aggregation effect, given its current scale of industry, geographical location, and salary levels, it finds it difficult to attract high-level petrochemical professionals. Li Shijie believes that if the petrochemical industry in Yangpu is to achieve further development in the future, it is necessary to attract more enterprises that can complement the existing industrial chain, so as to enable Yangpu’s oil and gas chemical industry to gain scale advantages and resource advantages. Centering on Hainan Refining and Chemical’s projects for 10 million tons of oil refining and 1 million tons of ethylene production, additional high-quality projects that are well in line with policy requirements, have significant impact, and generate good economic returns will be introduced. By extending, supplementing, and strengthening the industrial chain, the petrochemical industry will continue to expand and grow stronger. “Furthermore, it is recommended that the relevant authorities, prior to implementing island-wide closed-border operations, support Yangpu in expanding the scope of pilot programs and stress tests related to the free trade port policies such as \"openness at the first line of defense and strict control at the second line of defense.\" Enterprises that meet the criteria in the Yangpu development zone should be used as samples for conducting stress tests on the implementation of these policies, thereby helping to accumulate regulatory experience for island-wide closed-border operations. ”Li Shijie said. On March 26 of this year, the Yangpu Petrochemical New Materials Academician Workstation, led by Wang Jiming and four other academicians from the Chinese Academy of Engineering, was established and put into operation. It will provide decision-making advice, support, and guidance regarding the development strategy, plans, and other key issues related to the Yangpu Petrochemical functional area. “We will take the construction of Hainan Free Trade Port as an opportunity, and use the Academician Workstation for Petrochemical New Materials as a platform to attract top-tier talents and establish research and innovation platforms for green petrochemical new materials. We will focus on enhancing the technological innovation capabilities and overall competitiveness of Hainan’s refining and Yangpu’s petrochemical industries, offering strategies to accelerate the high-quality development of integrated refining operations in Hainan, and doing our best to help Yangpu become an international hub for the entire green petrochemical new materials industry chain. ”Wang Jiming said that the workstation will also provide consulting advice on projects such as the second phase of ethylene production and related raw material projects, as well as the development of an international base for the entire green chemical and new material industry chain in Hainan, and will work to facilitate the implementation of these projects. In the future, Yangpu will rely on the Yangpu Petrochemical New Materials Academician Workstation established by Academician Wang Jiming to fully leverage the leadership role of high-level talents such as academicians in economic development. It will promote the integration of industry, academia, and research in order to create a new hub for technological innovation, continuously expand the petrochemical industry chain, and help Yangpu’s petrochemical industry develop into a cluster worth hundreds of billions of yuan at an early date. At present, Yangpu has the capacity to produce 10 million tons of crude oil, 1.6 million tons of aromatic products, 2.1 million tons of PTA, and 2 million tons of PET. It also has the capability to store over 10 million cubic meters of oil and gas. Projects under construction include a 1 million-ton ethylene project and a 1.5 million-ton specialty oils project. The second phase of the PTA production project, with a capacity of 2.5 million tons, is already in the contract stage. Projects that have been signed include a 170,000-ton thermoplastic elastomer project and a 60,000-ton PBST project