The total investment amounts to over 21.8 billion! Latest updates on the 1.2 million tons per year Phase II ethylene project at Dushanzi Petrochemical! Attached: Sinopec’s large ethylene project!

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On August 7, CNPC Dushanzi Petrochemical Company held a meeting to advance the construction of the Tarim 1.2 million tons per year Phase II ethylene project, marking the full entry of this project into the construction phase. With this, Dushanzi Petrochemical has embarked on its journey to become a \"chemical aircraft carrier\" with an annual ethylene production capacity of over 3 million tons. 　　 The project was included in the **Petroleum and Chemical Industry Development Plan on July 18, and approved by the autonomous region on July 24. It serves as a \"model project\" for China National Petroleum Corporation to drive the transformation and upgrading of its refining and chemical operations and achieve high-quality development. 　　 The project is located in the Petroleum and Petrochemical Industrial Park of the Shangku High-Tech Industrial Development Zone in Korla. It will involve the construction of 11 main production units, including ones capable of producing 1.2 million tons per year of ethylene, 450,000 tons per year of high-density polyethylene, and 300,000 tons per year of low-density polyethylene. The proportion of domestically produced equipment for these processes exceeds 97%. At the same time, green and low-carbon demonstration projects are developed to ensure 100% use of green electricity; the electrification rate and overall energy consumption are at the leading level in the industry, while carbon dioxide emissions from the pyrolysis furnace flue gas and wastewater emissions are virtually zero. 　　 It is reported that once the project is put into operation, it will be able to produce over 2 million tons per year of high-end polyolefins and high-performance rubber materials, thereby further increasing the proportion of domestically produced goods in China’s petrochemical industry chain and supply chain, and promoting domestic economic circulation. 　　 The implementation of the second-phase ethylene project at Dushanzi Petrochemical is of great significance for fostering and strengthening Xinjiang’s oil and gas production and processing industry cluster, as well as for improving the development level of Xinjiang’s olefin industry chain. Leveraging the \"chain leader\" enterprise in Dushanzi Petrochemical, and using polyolefins and rubber as raw materials, the chemical industry can be further developed at the downstream stage. 　　 Dushanzi is one of the three birthplaces of China’s petroleum industry, with a history of oil extraction spanning 114 years and an oil refining history of 87 years. Dushanzi Petrochemical currently has a crude oil processing capacity of 10 million tons per year and an ethylene production capacity of 2 million tons per year. It has been recognized as a leader in energy efficiency for ethylene production on 10 occasions, and in 2023 it was designated by the State-owned Assets Supervision and Administration Commission of the State Council as a company aimed at becoming a world-class industry leader. 　　 Ethylene production is an indicator of the **development level of the petrochemical industry**. In 1995, Dushanbe Petrochemical built and put into operation an ethylene production facility with an annual capacity of 140,000 tons, marking the first time ethylene was produced in Xinjiang ； In 2009, the refinery with a capacity of 10 million tons and an ethylene production facility of 1 million tons was completed and put into operation, becoming the largest integrated refining and chemical enterprise in the country at that time ； In 2019, the annual ethylene production capacity reached 1.4 million tons, ranking first in the country ； In 2021, the Tarim 600,000 tons/year ethane-to-ethylene project was successfully commissioned on its first attempt. 　 To date, Dushanzi Petrochemical has achieved a production capacity of 1.4 million tons in its own facility and 600,000 tons in Tarim, resulting in an overall capacity of 2 million tons across the north and south. Once the 1.2 million tons per year ethylene production capacity of the newly established Tarim Phase II facility comes online, the total production capacity will exceed 3 million tons per year. 　　 By 2022, China’s ethylene production capacity had reached 46.75 million tons. In the first half of this year, Dushanzi Petrochemical produced 1.031 million tons of ethylene, a 3% increase on a year-on-year basis. According to the Blue Book on the Development of China’s Petroleum Distribution Industry (2022–2023), once completed, Dushanzi Petrochemical is expected to become the third-largest ethylene producer in the country, after Zhejiang Petrochemical and Zhenhai Refining & Chemical. It is reported that the approval application for the second phase of the Tarim ethylene project includes an investment of 21.88 billion yuan. Leveraging Tarim’s abundant oil and gas resources, the project involves the construction of a facility capable of producing 1.2 million tons of ethylene per year in the Shangku Industrial Park in Korla, along with 11 other production units, including two units for producing 450,000 tons of full-density polyethylene per year, three units for producing 300,000 tons of low-density polyethylene per year, and one unit for producing 450,000 tons of polypropylene per year. On April 26, the Korla ** website published the second public notice regarding the environmental impact assessment for Tarim’s 1.2 million tons per year phase II ethylene project, carried out by Dushanbe Petrochemical Company. Appendix: CNPC’s major ethylene projects 1. CNPC Guangxi Petrochemical’s integrated refining and chemical processing transformation project – the 1.2 million tons per year ethylene plant. On July 29, the inauguration ceremony for this 1.2 million tons per year ethylene plant was held at Qinzhou Port. The plant utilizes large-scale ethylene production technologies owned by CNPC, and it is primarily used to produce polymeric-grade ethylene, polymeric-grade propylene, hydrogenated gasoline, and styrene. Additionally, it produces by-products such as hydrogen, mixed C4 hydrocarbons, cracked C5 hydrocarbons, C9 hydrocarbons, and cracked fuel oil. This plant is the core component of CNPC Guangxi Petrochemical’s integrated refining and chemical processing transformation project, marking the official start of the phase of large-scale and rapid construction for this project. Petrochemical Insights recommendation: The 1.2 million tons per year ethylene production facility of Guangxi’s petrochemical integration and upgrading project has started operations! The total investment in this project is approximately 30.5 billion yuan, with completion and operation scheduled for 2025. The refining complex relies on its existing 30 main production units; it will construct a diesel adsorption and dearomatization unit with an annual capacity of 2 million tons, as well as a carbon dioxide recovery unit with an annual capacity of 400,000 tons (including a catalytic dry gas carbon dioxide recovery unit with a capacity of 100,000 tons and a carbon dioxide recovery unit with a capacity of 400,000 tons, both to be built in the chemical industry zone). Two of the main production units will be shut down. 14 new chemical production units will be constructed in the chemical complex, including an ethylene plant with a capacity of 1.2 million tons per year, a pyrolysis gasoline hydrogenation/styrene extraction combined plant with a capacity of 550,000 tons per year, a butadiene extraction plant with a capacity of 180,000 tons per year, MTBE/butene-1 plants with capacities of 100,000/60,000 tons per year respectively, an aromatic hydrocarbon extraction plant with a capacity of 350,000 tons per year, a full-density polyethylene plant (FDPE) with a capacity of 400,000 tons per year, a high-density polyethylene plant (HDPE) with a capacity of 300,000 tons per year, a tubular ethylene-vinyl acetate plant (EVA) with a capacity of 300,000 tons per year, a batch-type ethylene-vinyl acetate plant (H-EVA) with a capacity of 100,000 tons per year, a polypropylene plant (PP) with a capacity of 400,000 tons per year, a hexene-1 plant with a capacity of 50,000 tons per year, a propylene oxide/styrene plant (PO/SM) with capacities of 270,000/600,000 tons per year respectively, a polystyrene plant (PS) with a capacity of 300,000 tons per year, and integrated styrene-butadiene rubber production plants (SSBR/SBS) with capacities of 120,000/80,000 tons per year respectively. 2. Lanzhou Petrochemical’s Transformation and Upgrading Project for Ethylene Production: The first public announcement regarding the environmental impact assessment for this project was made 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. At the same time, Lanzhou Petrochemical will also start building a new materials plant with an annual capacity of 1 million tons. 3. The ethylene project at Dalian Petrochemical: According to China National Petroleum Corporation’s plans, the Changxing Island refining and chemical complex is part of the relocation and renovation project for Dalian Petrochemical Company. The project is constructed in phases, with Phase 1 involving new construction and Phase 2 involving relocation. Phase 1 will build a refinery with a capacity of 10 million tons per year and an ethylene plant with a capacity of 1.2 million tons per year. Once all facilities are completed and put into operation, West Chūshima will ultimately have a refining capacity of 20 million tons and an ethylene production capacity of 2.4 million tons. 4. Jilin Petrochemical to build a new 1.2 million tons/year ethylene plant. The key components of Jilin Petrochemical’s transformation and upgrading project include: building 21 new refining and chemical processing units, including one capable of producing 1.2 million tons of ethylene per year and another capable of producing 600,000 tons of ABS per year; upgrading 9 existing units; and shutting down 7 units, including one that produces 150,000 tons of ethylene per year. On November 12, 2022, the construction project for Jilin Petrochemical’s 1.2 million tons per year ethylene production facility officially commenced. Once completed and put into operation, Jilin Petrochemical’s total ethylene production capacity will reach 1.9 million tons per year, bringing its ethylene production capacity and overall chemical manufacturing scale to advanced levels in China. CNPC Jilin Petrochemical will build new LDPE and HDPE plants, using LyondellBasell’s technology. 5. Daqing Petrochemical Ethylene Plant – Bottleneck Removal and Downstream Supporting Projects. The projects aimed at removing bottlenecks in the company’s ethylene plant as well as developing downstream supporting facilities are part of the company’s long-planned expansion and modernization initiatives; once completed, the company’s total ethylene production capacity will reach 1.38 million tons per year. Not only that, but the project also includes energy-saving measures; after the renovation, the energy consumption of E3 ethylene will be further reduced, reaching industry-leading levels of energy efficiency, and Daqing Petrochemical will make another significant leap forward. The project will also involve the renovation of the downstream supporting facilities, including three units for gasoline hydrogenation (G3), three units for aromatic extraction (F3), three units for butadiene extraction (B3), and two units for MTBE production (M2), as well as the tank areas and utility facilities. 6. 1.2 million tons per year of ethylene production from ethane in Ordos, Inner Mongolia: In 2022, the construction of a facility for producing ethylene from ethane at a capacity of 1.2 million tons per year began in Ordos, Inner Mongolia, as part of the second phase of Lanzhou Petrochemical’s Changqing project. This is another major project for the allocation of resources in Shaanxi, Gansu, Ningxia, Qinghai, and Mongolia. To ensure high-quality regional development and product upgrading as well as to accelerate the transformation of achievements based on independent intellectual property rights, the Lanzhou Petrochemical Innovation and Informatization Center was established in Lanzhou in October 2022. It was jointly set up by CNPC’s research institutes and design institutes located in Lanzhou, CNPC’s enterprises in Gansu Province, and Lanzhou University. By 2025, the investment in research and development is expected to reach 1 billion yuan per year.