[Haichuan Chemical Salary Updates] Construction of Tarim Ethane to Ethylene Project Begins

It is reported that the total investment in this project amounts to 9.05 billion yuan (RMB; the same below). By leveraging the natural gas resources of the Tarim Oil Field as well as China National Petroleum Corporation’s proprietary ethylene production technology, it will become one of the first ethylene production facilities in China to use pure ethane as feedstock. The project construction includes an ethylene plant with an annual capacity of 600,000 tons, a full-density polyethylene plant with a capacity of 300,000 tons, and a high-density polyethylene plant with a capacity of 300,000 tons, along with supporting utility systems, auxiliary production facilities, and off-site projects.

The natural gas production from the Tarim Oil Field accounts for one-sixth of China’s total production. As planned, the production volume in 2020 will reach 31 billion cubic meters. The already completed deep recovery project for light hydrocarbons from the condensate gas in the Tarim Oil Field has an annual processing capacity of 10 billion cubic meters of natural gas; it enables the separation of 762,000 tons of ethane per year, which serves as raw material for projects aimed at producing ethylene from ethane. As China National Petroleum’s largest single-scale refining and chemical project in southern Xinjiang at present, the project is scheduled to be completed and put into trial operation in June 2021. The annual output value is expected to reach 6 billion yuan, with annual tax contributions of nearly 700 million yuan. It will give rise to an industry cluster led by ethylene, creating 1,200 direct jobs. (End)

Project construction schedule: Official commencement on June 19, 2019. Completion of underground main pipeline construction on-site by 2019; 30%-50% completion of the pipe racks across the plant, with all pile foundations and foundations for major equipment completed. The core frameworks of key buildings such as the office building and shift apartments are largely finished. The steel structure of the radiation section of the ethylene plant’s cracking furnace is fully completed. Mechanical installation of the plant is finalized by December 2020

Background of the project development: In December 2017, adhering to the principles of \"local conversion of resources, comprehensive utilization, and joint development between enterprises and local communities,\" CNPC took advantage of the abundant natural gas resources in the Tarim Oil Field to decide to build an ethane-to-ethylene production facility in Bortala Prefecture, Xinjiang. This move was aimed at promoting the transformation and upgrading of its refining and chemical processing operations, contributing to the comprehensive economic and social development of Xinjiang, and making greater contributions to achieving the overall goals of social stability and long-term peace in the region. Significance of the project: The Tarim ethane-to-ethylene project is a key initiative for the transformation and upgrading of China National Petroleum Corporation’s refining and petrochemical operations, as well as a vital project for the company’s efforts to become a world-class enterprise. It is one of the first ethylene production plants in China to use pure ethane as feedstock, built by leveraging the abundant natural gas resources of the Tarim Oil Field and PetroChina’s proprietary ethylene production technology. It represents another major project undertaken by the Tarim Oil Field Company to accelerate the integrated development of upstream and downstream operations, thereby contributing to the economic and social progress of southern Xinjiang. It has been designated by the National Development and Reform Commission and the Ministry of Industry and Information Technology as a demonstration project for producing ethylene from ethane, and is included in the \"Planning Scheme for the Petrochemical Industry (Revised Version)\". This project aims to set an example in terms of advanced technology, equipment manufacturing, project construction, operation, environmental sustainability, and high-quality development.

The site for the Tarim ethane-to-ethylene project is located in the Petroleum and Petrochemical Industrial Park of the Shangku High-Tech Industrial Development Zone in Korla, Bayingolin Mongol Autonomous Prefecture, with a planned land area of 147.64 hectares. The total investment in the project amounts to 9,051.83 million yuan, of which the project’s equity capital is 3,233.26 million yuan; this equity capital accounts for 36% of the total project investment, with the remaining funds being financed through loans. The main construction contents and scale of the project include an ethylene plant with a capacity of 600,000 tons per year, a full-density polyethylene (FDPE) plant with a capacity of 300,000 tons per year, and a high-density polyethylene (HDPE) plant with a capacity of 300,000 tons per year. The supporting utility and auxiliary facilities mainly include water supply and drainage, power supply, telecommunications, heating, ventilation and air conditioning, nitrogen and oxygen stations, air compressor stations, maintenance (including mechanical, electrical, and instrumentation maintenance), plant-wide warehouses (including chemical warehouses and general warehouses), coal storage and transportation, a central laboratory, and flares. The ethylene plant utilizes Sinopec’s own ethane steam cracking technology for ethylene production, while the full-density polyethylene (FDPE) plant employs Univation’s Unipol low-pressure gas-phase fluidized bed process. The high-density polyethylene (HDPE) plant uses Lyondellbasell’s Hostalen ACP low-pressure slurry process.

The Petroleum and Petrochemical Park in the Shangku High-Tech Zone of Korla is located to the southwest of the Kurchu Horticultural Farm, on the north side of the road that runs alongside the West-East Gas Pipeline from Lunnan Town to Tiemenguan City. It is about 35 kilometers away from Tiemenguan City in the Second Division of the Xinjiang Production and Construction Corps, and 65 kilometers away from Korla City; the total planned area of this park is 95 square kilometers.