40 major projects included in the petrochemical revitalization plan

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40 major projects included in the petrochemical revitalization plan Source: China Securities Journal By 2011, the industry’s value added is expected to reach 1.75 trillion yuan Authors: Zhang Nan, Dong Wensheng Source: China Securities Journal·Zhongzheng Net Details of the petrochemical industry plan obtained exclusively by reporters from China Securities Journal show that the overall goal is for the growth rate of the petrochemical industry to be in line with the overall development pace of the national economy, with an average annual increase in value added of around 15%, so that by 2011 the value added will reach 1.75 trillion yuan. At the same time, 20 major projects under construction and 20 major new projects have been included in the plan. People familiar with the industry confirmed to reporters that these contents are based on the adjustment and revitalization plan. The three-year goals are set in a step-by-step manner. As can be seen from the projects given priority in the plan, products such as refining, ethylene, xylene (PX), purified terephthalic acid (PTA), fertilizers, and olefins receive direct support. The 20 key construction projects that need to be given close attention include: Fujian Refining and Chemical’s 700,000-ton PX plant, Huizhou’s 1 million-ton PX plant, Shanghai Petrochemical’s 600,000-ton PX plant, Urumqi in Xinjiang’s 1 million-ton PX plant, Foshan Shishi in Fujian’s 600,000-ton PTA plant, Jiangyin Hanbang in Jiangsu’s 600,000-ton PTA plant, and Fuling in Chongqing’s 600,000-ton PTA plant. The oil refining and ethylene production capacities include: 12 million tons of oil refining in Huizhou, Guangdong; expansion and upgrading of oil refining capacity to 10 million tons along with 1 million tons of ethylene production in Xin* Dushanzi; expansion and upgrading of oil refining capacity to 12 million tons along with 800,000 tons of ethylene production in Fujian Refining & Chemical; expansion and upgrading of oil refining capacity to 12.5 million tons along with 1 million tons of ethylene production in Tianjin; 10 million tons of oil refining capacity in Guangxi; 1 million tons of ethylene production in Zhenhai; 800,000 tons of ethylene production in Fushun; expansion and upgrading of ethylene production capacity to 1.2 million tons in Daqing; and 500,000 tons of olefins produced from heavy oil in Shenyang. The fertilizer projects include: 1.2 million tons of phosphoric ammonium fertilizer produced by Yunnan Yuntianhua, 1 million tons of potash-magnesium fertilizer produced by Qinghai CITIC Guoan, and 800,000 tons of urea produced in Korla, Xinjiang. It also includes Shenhua Baotou’s 600,000-ton coal-to-olefins project. In addition to the overall goal, the revitalization plan sets three-year phased goals: maintaining stable operations in 2009, with the growth rate of industrial added value exceeding 10% ； In 2010, the upgrading of oil product quality was largely completed, the goals set out in the 11th Five-Year Plan were mostly achieved, and the growth rate of industrial added value reached 15% ； By 2011, the adjustment of the industrial structure and layout was largely completed, the allocation of resources in industrial clusters was continuously improved, institutional and policy-related issues were properly resolved, and the growth rate of industrial added value reached 20%. Key companies benefit from key projects; analyzing these supported projects reveals a correspondence with the “products of core and key enterprises” as reported by China Securities Journal reporters earlier. Of these 20 major projects under construction, the vast majority are refining and chemical enterprises affiliated with Sinopec and CNPC; the beneficiaries of the remaining projects are also key companies in the industry such as Yuntianhua, CITIC, and Shenhua. It is not surprising that these industries and products have made it onto the support list. Industry experts point out that PX is a raw material used in the production of PTA, and PTA is a key raw material for synthetic fibers; therefore, the synthetic fiber industry will receive policy support as a result. Among these projects, refining and ethylene projects account for a significant proportion. In fact, domestic refineries are currently facing issues such as low operating rates and weak sales, but in the long term, a steady increase in refining capacity is of great significance for **economic development. During the nationwide oil shortage that occurred last year, the issue of insufficient refining capacity became apparent. At present, the domestic self-sufficiency rate for olefins is only 50%; to ensure domestic supply security and stimulate economic development, large-scale investments in refining and olefin projects will have a significant impact in boosting domestic demand. Among the three types of chemical fertilizers—nitrogen, phosphorus, and potassium—phosphorus and potassium fertilizers are resource-based products with a high degree of import dependence, and they have consistently received policy support. There is an overcapacity in the domestic production of nitrogen fertilizers, and the industry lacks concentration; meanwhile, CNPC’s 2.8-billion-yuan investment in a 800,000-ton urea production facility in Korla is set to become the largest single-scale production unit on land in China, and it receives support. Let’s discuss whether these investments in the petrochemical industry will help it get through the crisis This post was last edited by mine0613 on 2009-2-20 10:01.]