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Summary of key planned and under-construction large ethylene projects in China in 2023; the main companies involved are Sinopec, CNPC, CNOOC Shell, SABIC (joint venture), BASF, ExxonMobil, and Wanhua. 1. Sinopec Luoyang’s million-ton ethylene project: On March 31, 2023, the Environmental Impact Assessment Report for Sinopec Luoyang Branch’s million-ton ethylene project was approved by the Provincial Department of Ecology and Environment. The project is located in the Advanced Manufacturing Development Zone of Mengjin District, with an investment of 24.6 billion yuan in its construction. On March 3, 2022, the Henan Provincial Department of Ecology and Environment approved the environmental impact assessment for the expansion plan of the petrochemical industry cluster, laying a solid foundation for the establishment of the million-ton ethylene project. On March 31, 2023, the environmental impact assessment for Sinopec Luoyang’s million-ton ethylene project was successfully approved by the Provincial Department of Ecology and Environment, laying a solid foundation for the smooth implementation of the project. Public information indicates that the construction of Sinopec’s one-million-ton ethylene project in Luoyang will commence in May 2023, with efforts aimed at completing and commissioning it in 2025. 2. Sinopec Hainan Refining & Chemical Company’s 1 million tons per year ethylene plant: On February 21, 2023, all units in Sinopec Hainan Refining & Chemical Company’s 1 million tons per year ethylene project were successfully connected, enabling a successful commissioning with a single batch of feedstock. Sinopec Hainan Refining & Chemical Co., Ltd.’s 1 million tons per year ethylene project utilizes advanced chemical engineering technologies available worldwide, and it includes a 1 million tons per year ethylene cracking unit as well as a total of 10 downstream chemical processing units. The project required an investment of over 28.6 billion yuan; construction began in January 2021, and it was completed in November 2022. With the successful commissioning of the project, a \"zero breakthrough\" was achieved in Hainan’s ethylene industry, which has become a new \"engine\" for the development of the Hainan Free Trade Port. 3. Sinopec Yueyang 1.5 million tons/year ethylene plant: The total investment in Sinopec Yueyang’s 1.5 million tons/year ethylene integrated refining and processing project is 4.047 billion yuan, with Sinopec Changling Refining and Chemicals Branch as the project developer. The site is located within the reserved area of the existing plant. The main construction activities include upgrading the existing crude oil distillation unit with a capacity of 8 million tons per year to 10 million tons per year, building a new hydrocracking unit with a capacity of 3 million tons per year, constructing a new solvent deasphalting unit with a capacity of 1 million tons per year, and building a new sulfur recovery facility with a capacity of 60,000 tons per year. In addition, storage and transportation facilities as well as utility systems will also be installed. On the morning of January 14, 2023, the work report presented at the first session of the 14th Hunan Provincial People’s Congress stated that in 2023, efforts would be focused on the high-quality development of the manufacturing sector, with particular attention being paid to projects such as the Yueyang ethylene refining and chemical integration project. 4. Sinopec Tianjin Petrochemical Nangang 1.2 million tons/year ethylene plant: On March 10, 2023, the infrastructure construction for Sinopec’s 1.2 million tons/year ethylene plant, located in the Nangang Industrial Zone of Tianjin Economic Development Zone, was completed, and the phase of centralized installation of the production equipment began. The Tianjin Petrochemical Nangang 1.2 million tons per year ethylene and downstream high-end new materials industrial cluster project is a major initiative aimed at advancing the coordinated development strategy of the Beijing-Tianjin-Hebei region; it was officially launched in May 2021. The Nangang Ethylene Project is led by an ethylene plant with an annual production capacity of 1.2 million tons. Aiming to reach world-leading standards, fill gaps in China’s manufacturing sector, and replace imported products, the project involves the development of 12 advanced new material production facilities for ultra-high molecular weight materials, α-olefins, ALL-PE, ABS, POE, HDPE, and other products. It is understood that the Nangang ethylene plant is expected to be completed by 2023, with the entire project complex set to be finished by 2025. On December 7, 2022, Ineos signed a new cooperation agreement with Sinopec; Ineos will acquire a 50% stake in Sinopec’s Tianjin Nangang ethylene project. The project currently has a 1.2 million-ton ethylene cracking unit under construction, along with facilities for producing high-end new material derivatives; these are expected to come online by the end of 2023. 5. The CNPC Dalian Changxing Island ethylene project is expected to see accelerated progress, with construction set to begin by the end of 2023 or in 2024. The project has been delayed, probably due to supporting factors such as project infrastructure, green energy, and land reclamation, which have affected its progress. (Note: According to the original plan, construction on the Xizhongdao project was supposed to begin in 2022, with the goal of completing it and putting it into operation in 2024. On the afternoon of April 4, Zhao Dong, Secretary of the Party Working Committee and Director of the Management Committee of the Changxing Island Economic Zone, presided over a special meeting on the formation of the leadership team for the relocation and upgrading of CNPC Dalian Petrochemical, as well as on the progress of the project investment contracts. The meeting was held to review the plans of the leadership team, the status of work progress, and the negotiations regarding the investment contracts for the Dalian Petrochemical refining project. The meeting emphasized the need to fully recognize the great significance and importance of CNPC Dalian Petrochemical’s project for relocation and upgrading. At present, our region is striving to build a green petrochemical industry cluster worth trillions of yuan, and to accelerate the development of a special industrial park that ranks among the best in China and first-class internationally. The relocation and upgrading project of Sinopec Dalian Petrochemical is crucial for the future development of Changxing Island; it carries the hopes for the region’s economic growth in the future and its \"renewed prosperity.\" This project will help turn Xizhong Island into another key engine for economic growth in our region, creating a development pattern in which Hengli Petrochemical and this new facility work together to drive progress, with one site in the north and the other in the south. In accordance with the unified arrangements of the Dalian Municipal Party Committee and the municipal government, efforts are being made to start construction on the PetroChina Dalian Petrochemical relocation and upgrading project within this year. 6. In February 2023, PetroChina’s 1.2 million tons per year Phase II ethylene project in Dushanzi-Tarim underwent the first public announcement regarding environmental impact assessment for that project. A new facility with an annual production capacity of 1.2 million tons of ethylene and related products will be built, including 2 units for producing 450,000 tons per year of high-density polyethylene, 300,000 tons per year of low-density polyethylene, and 450,000 tons per year of polypropylene; 3 units for producing 50,000 tons per year of styrene-butadiene rubber; 120,000 tons per year of butadiene extraction; 80,000/40,000 tons per year of MTBE/butene-1; 350,000 tons per year of hydroprocessed naphtha; and 250,000 tons per year of aromatic extraction. Additionally, there will be supporting utility systems and auxiliary facilities. 7. Sinopec Lanzhou Petrochemical’s Transformation and Upgrading Project for Ethylene Production: On March 27, 2023, with the commencement of the expropriation process for the buildings and structures on state-owned land as part of this transformation project, the buildings and constructions on such land in the Chemical Industry Street area were demolished. Staff were assigned to ensure safety by evacuating onlookers and setting up barriers at the site. The first public notice regarding the environmental impact assessment for the ethylene renovation project aimed at the transformation and upgrading of Lanzhou Petrochemical was released recently. The project involves an investment of 23.17 billion yuan, including the construction of a new ethylene plant with an annual production capacity of 1.2 million tons. The project construction site is located in the refinery area, fertilizer and ethylene plant area, and petrochemical rubber plant area of Lanzhou Petrochemical Company. The main construction contents can be divided into the main project and the projects to be put into use in advance. This project utilizes CNPC’s own proprietary technology. Once it is put into operation, it will help achieve the goals of transforming and upgrading Lanzhou Petrochemical’s refining operations, ensuring that the energy efficiency of ethylene production meets required standards, eliminating safety risks, and promoting green and low-carbon development, thereby driving overall improvements in the ethylene industry at Lanzhou Petrochemical. Meanwhile, Lanzhou Petrochemical will also successively start construction on a new materials plant with a capacity of 1 million tons per year. 8. CNPC Guangxi Petrochemical Integration and Upgrading Project: On the morning of March 28, the groundbreaking ceremony for CNPC’s Guangxi Petrochemical integration and upgrading project was held in Qinzhou. Recently, the PetroChina Guangxi Petrochemical Integration and Transformation Project is located in the Jingu area of the Petrochemical Park within the Qinzhou Port Economic and Technological Development Zone. With a total investment of around 30.5 billion yuan, it is a major project as part of the planning for the petrochemical industry; it also represents a strategic initiative by PetroChina to shift towards a model that emphasizes chemical processing over oil production. This includes 14 chemical processing units such as a new ethylene cracking unit with an annual capacity of 1.2 million tons, as well as 2 refining units for diesel adsorption and dearomatization with an annual capacity of 2 million tons. It also involves the construction and renovation of certain refining unit facilities, along with corresponding utility, storage, transportation, and auxiliary production systems. The main products manufactured are polyethylene, polypropylene, synthetic rubber, and ethylene-vinyl acetate copolymer (EVA). The project is scheduled to be handed over in phases by the end of 2024, with full completion and commissioning expected in 2025. 9. CNOOC Shell Huizhou Phase III Ethylene Project: On March 27, 2023, the signing ceremony for the preliminary investment agreement regarding the CNOOC Shell Huizhou Phase III Ethylene Project was held in Beijing. The CNOOC-Sinopec Huizhou Phase III ethylene project is a **major foreign investment project**, with a total investment of approximately 52.1 billion yuan. The signing of the preliminary investment agreement marks that the project has entered a stage of substantive implementation. This project introduces a number of advanced technologies that are used for the first time in China and Asia, and will result in the construction of the world’s largest metallocene polyethylene plant, thereby helping CNOOC Shell to develop its products toward higher quality and greater differentiation. CNOOC Shell Huizhou Phase III Ethylene Project represents another collaboration between CNOOC and Shell, building on the successful partnership established in the Phase I and Phase II projects of CNOOC Shell. In November 2002, the CNOOC-Shell Phase I ethylene project with an annual production capacity of 800,000 tons, for which the total investment amounted to $4.3 billion through a partnership between CNOOC and Shell, entered the implementation phase; it became the largest Sino-foreign joint venture project in China at that time ； In December 2014, the construction of CNOOC Shell Phase II ethylene project with an annual production capacity of 1.2 million tons began, involving a total investment of around $4.9 billion; it was completed and put into operation in April 2018. With the completion and commissioning of phases 1 and 2, CNOOC Shell has become one of the largest single ethylene production plants in operation in China to date. On the morning of March 29, construction began. 10. On March 26, 2023, Saudi Aramco, in partnership with Beifang Industrial Group and Panjin Xincheng Industrial Group, planned to build a large-scale integrated refining and petrochemical complex in Northeast China. The joint venture was named Huajin Aramco Petrochemical Co., Ltd., with the three parties holding 30%, 51%, and 19% of the shares respectively. The joint venture includes a refinery with a daily processing capacity of 300,000 barrels, and a chemical plant that produces 1.65 million tons of ethylene and 2 million tons of p-xylene per year. Upon obtaining the necessary administrative approvals, construction of the project will begin in the second quarter of 2023, with full operation expected to commence in 2026. The joint venture will be located in Panjin City, Liaoning Province, with Saudi Aramco supplying up to 210,000 barrels per day of crude oil to it. Panjin Xincheng Industrial Group stated on its WeChat official account that the total investment in this project is expected to reach 83.7 billion yuan. 11. The 1.5 million-ton ethylene project in Zhongsha Gulei: On April 2, 2023, the preliminary construction work for the ethylene project in Zhongsha Gulei officially began. The Zhongsha Gulei Ethylene Project is the largest Sino-foreign joint venture project in Fujian Province to date, jointly invested in by Saudi Basic Industries Corporation (SABIC), Fujian Energy and Petrochemical Group, and Zhangzhou Jiulongjiang Group. The project includes a world-class ethylene production facility with an annual capacity of 1.5 million tons, as well as downstream processing units; the total investment amounts to 42.07 billion yuan. On June 2, 2022, the Zhongsha Gulei ethylene project was approved. 12. ExxonMobil Huizhou Ethylene Project: On March 8, the first large-scale piece of equipment for the LDPE unit at the ExxonMobil Huizhou Ethylene Project—the degassing silo—was successfully hoisted into place. This marks the transition of the project from the civil construction phase to the installation phase. ExxonMobil’s Huizhou ethylene project is **one of the major foreign-invested projects**, located in the Daya Bay Petrochemical Park in Huizhou. The total investment in the project exceeds $10 billion, with construction planned in two phases. The first-phase project mainly includes an ethylene plant, as well as production facilities for high-end polyethylene and polypropylene products in the mid- and downstream stages, along with the supporting utility systems, docks, storage and transportation facilities, and environmental protection systems. The various high-end chemical products manufactured can meet the needs of customers in various application areas such as packaging, automotive industry, industrial applications, consumer goods, as well as hygiene and personal care products. 13. BASF (Guangdong) Integrated Project: On March 13, construction began on the new production complex at BASF’s Zhanjiang integrated facility. Piling work for the first unit at BASF’s Zhanjiang integrated site began in 2020. In July 2022, BASF Europe made the final investment decision to advance the construction of the Zhanjiang integrated facility on a comprehensive basis. On September 6, 2022, the first unit at BASF’s Zhanjiang integrated facility was officially put into operation. From now on, BASF will increase production of modified engineering plastics for the Chinese market by 60,000 tons per year, raising the total production capacity for this product in the Asia-Pacific region to 420,000 tons starting in 2023. 14. Wanhua Chemical’s Phase II project: On March 9, 2023, an inauguration ceremony was held on site for the ethylene cracking unit of Wanhua Chemical’s 1.2 million tons per year ethylene and related high-end polyolefin production project. Wanhua Chemical plans to carry out the Phase II ethylene project at its Yantai industrial park, aiming to build a facility with an annual production capacity of 1.2 million tons of ethylene as well as high-end polyolefin products derived therefrom. This initiative will enable the industrialization of high-end polyolefin products such as POE and other specialty materials developed in-house. The Phase II ethylene project will use ethane and naphtha as feedstock, thereby enabling efficient coordination with the existing PDH integrated plant and the Phase I ethylene project. The planned project covers an area of approximately 1,215 mu. It will primarily include a 1.2-million-ton/year ethylene cracking unit, a 250,000-ton/year low-density polyethylene (LDPE) plant, two 200,000-ton/year polyolefin elastomer (POE) units, a 200,000-ton/year butadiene plant, a 550,000-ton/year cracked gasoline hydrogenation unit (including a 30,000-ton/year styrene extraction facility), a 400,000-ton/year aromatics extraction unit, as well as supporting auxiliary works and utility facilities. The project has been approved by the Shandong Provincial Development and Reform Commission, and is expected to begin operations in phases starting in October 2024.