Shandong crude oil pipeline

CNPC may acquire Dongming Petrochemical

I heard that Shandong Province is also planning to build several crude oil pipelines. Does anyone know anything about this?

I’m very concerned too; please give me some advice, masters!

A oil pipeline from Yantai Port to Zibo is under planning.

Introduction to the 10 million tons/year oil pipeline project: The 10 million tons/year oil pipeline is a supporting facility for the 8 million tons/year refining project. In line with the development plans of Dongming Petrochemical, the designed capacity of this pipeline has been initially set at 1000×104 tons per year. The operating pressure of the pumping station (as well as the pipelines) is determined based on a combination of factors such as the designed flow rate of the pipelines, appropriate pipe diameters and wall thicknesses, the number of oil transfer stations, the performance of the oil transfer pumps, the strength of the pipe materials, and the pressure rating of the valves. Based on the flow rate, transportation process, line length, and pipe diameter of this pipeline project, the design pressure for the main line has been preliminarily determined to be 6.4 Mpa. Based on a comprehensive analysis of one-time project investment, transportation costs, and pipeline capacity surplus, a pipe diameter of φ500mm is recommended. 1. Background and significance of the project: With the gradual liberalization of China’s crude oil and refined oil distribution system, domestic refineries are facing fierce competition from large foreign petrochemical companies. Enhancing their competitive capabilities in order to survive and thrive in this competition has become a major practical challenge for these domestic enterprises. Reducing production costs is a key strategy for Dongming Petrochemical to address challenges and competition. One of the most promising measures for cutting costs is to reduce the expenses associated with transporting crude oil. The costs of transporting crude oil are mainly reflected in two aspects: freight charges and losses. Compared to road and rail transportation, pipeline transportation offers significant advantages in terms of both transportation costs and losses. 2. Environmental Protection: The Dongming crude oil pipeline project passes through Rizhao, Linyi, Jining, Heze, and Dongming. The topographical characteristics of the areas along its route vary significantly; the predominant landforms are alluvial plains and the Yimeng mountain range. The areas through which the pipeline passes are part of the Huangfan Plain and the Yimeng mountain range. There are no major pollution sources along the route, and the atmospheric environment meets the second-level standards for environmental air quality; the main pollutants are SOx, NOx, and TSP ； The surface water environment meets the Class II standards of the surface water quality regulations; the main pollutants are COD, SS, and BOD. There are nature reserves along the pipeline route, and no culturally significant sites that require protection. 3. The estimated investment for the project construction is approximately 800 million yuan. 4. Economic benefit analysis: Upon completion of the project, it is expected to generate sales revenue of 600 million yuan and total profits and taxes of 250 million yuan.

It is reported that Shandong Dongming Petrochemical Group Co., Ltd. (Dongming Petrochemical) currently has a processing capacity of 6 million tons per year; with the addition of new facilities, this capacity is expected to reach around 10 million tons per year by 2010–2011. At present, Dongming Petrochemical is planning to invest over 2 billion yuan in building the Rizhao–Dongming pipeline. The pipeline will have a diameter of Ф610 mm, a total length of 446 kilometers, and a designed oil transport capacity of 10 million tons per year. This project has been approved by the Shandong Provincial Development and Reform Commission, and the preliminary design work has been entrusted to CNPC Northeast Design Institute. Construction is expected to begin in the second half of this year, with completion targeted for the first half of 2010; the construction period is estimated to be around 6 months. However, it is reported that since Dongming Petrochemical does not have the qualifications to purchase imported crude oil, it can only acquire heavy oils such as M100 for processing. If an investment were made to build a pipeline from Rizhao to Dongming to transport such heavy oils, pressure and heating stations would need to be constructed every 10 kilometers, resulting in extremely high investment and operating costs that the company cannot afford. At present, the Dongming Group is carefully considering the possibility of building such a pipeline.

It seems that Changyi Petrochemical has also planned a pipeline

This post was last edited by Refiner on 2009-6-6 22:02. The Yantai Port Authority plans to build a crude oil pipeline on its own, from Yantai to Dongying; it is said that a fee will be charged per ton.

When CNOOC acquired HAIHUA, it promised the authorities in Weifang that it would expand HAIHUA’s production capacity to 5 million tons. Given HAIHUA’s current transportation capabilities, it is not possible to achieve such a production level. In my opinion, building oil pipelines from CNOOC’s facilities to HAIHUA’s plant can help reduce transportation costs and also allow CNOOC to keep its promise to the authorities in Weifang