Another milestone reached for the 68.5-billion yuan petrochemical giant! Second feasibility study launched for Dalian Petrochemical Xizhongdao project; target to start construction by 2026 is clear

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Recently, the highly anticipated integrated refining and chemical processing project of China National Petroleum Corporation’s Dalian Petrochemical Company (Xizhongdao) (hereinafter referred to as the “Dalian Petrochemical Xizhongdao Project”) has seen significant progress at the preliminary stage. On March 18, a public competitive bidding process (second round) was held for the consultation services related to the feasibility study of the Dalian Petrochemical (Xizhongdao) integrated refining and chemical processing project. The aim of this process was to remove the final obstacle before construction can begin on what is considered China’s first large-scale project of relocating and rebuilding a petrochemical enterprise, with a total investment of 68.5 billion yuan. The main objective of this procurement is to conduct a comprehensive assessment of the conditions necessary for project implementation and to produce a report covering an analysis of the elements supporting the project, an evaluation of the progress made in preliminary work, as well as an analysis of the development environment and relevant policies. This report aims to provide targeted recommendations and guidance to help the project be included in the plans and ready for commencement. This marks a solid step forward for the project, toward the goal of commencing actual construction by 2026, following the approval of the pre-feasibility study and the initiation of preliminary surveys. The Dalian Petrochemical Xizhongdao project is not a simple replication of existing production capacity; rather, it is a \"chemical-type\" refinery tasked with carrying out transformation and upgrading. The project is located in the Dalian Changxing Island (Xizhongdao) Petrochemical Industrial Park. The key construction elements include: core facilities – a new chemical-type refinery with an annual capacity of 10 million tons, an ethylene plant with an annual capacity of 1.2 million tons, as well as facilities for the comprehensive utilization of low-carbon olefins derived from these processes. High-end downstream sector: Focus on developing products with high added value; plans to build 1 plant for producing 400,000 tons per year of polypropylene (PP), 2 plants for producing 450,000 tons per year of fully dense polyethylene (FDPE), 1 plant for producing 300,000 tons per year of low-density polyethylene (LDPE), 1 plant for producing 200,000 tons per year of polyolefin elastomers (POE), and 1 plant for producing 300,000 tons per year of CHPPO. Supporting projects: These include oil storage and transportation, utility systems, auxiliary facilities, and off-site works; it is also planned to integrate low-carbon nuclear steam with green electricity to emphasize the concept of green and low-carbon development. The project is designed to use Russian crude oil as its primary raw material (100% in the initial phase), with the flexibility to process a mixed crude of \"70% Russian oil + 30% Saudi heavy oil.\" The construction of some heavy oil processing facilities and a crude oil terminal with a capacity of 30,000 tons will be postponed to leave room for future development. The progress of the Xizhongdao project at Dalian Petrochemical is closely linked to the gradual phase-out of the old plant area, illustrating a clear approach of \"breaking old structures while establishing new ones\": The old plant area was completely shut down in June 2025, when the 10 million tons per year atmospheric and vacuum distillation unit ceased operations, marking the end of production there. Subsequently, the safe, environmentally friendly, and compliant disposal of the materials and solvents was successfully completed, laying a solid foundation for the relocation. Acceleration of preliminary work: In November 2024, the project’s pre-feasibility study report was approved by China National Petroleum Corporation. In August 2025, the environmental impact assessment for the land reclamation project was made publicly available for the first time. Entering 2026, the bidding for the preliminary survey work of the project has been completed, providing a geological basis for the preliminary design ； Meanwhile, the relevant approvals for the use of sea areas for the project (such as those for the buried utility tunnel facility) have also been obtained one after another. Current key milestone: The procurement of these “feasibility study and consulting services” is a crucial step that enables the project to move from the ‘reserve’ phase to the ‘planning’ phase, ultimately leading to the acquisition of construction permits. The Dalian municipal government has explicitly designated this project as a major initiative during the 15th Five-Year Plan period, striving to start its construction as soon as possible. As the first large-scale case of relocating and rebuilding a petrochemical enterprise in China, the Dalian Petrochemical Xizhongdao project holds great significance: it serves as an engine for industrial upgrading. By reducing the proportion of oil-related operations and increasing those related to chemical processing, as well as by focusing on high-value chemical products, this project aims to drive the industry toward higher levels of sophistication, precision, and low carbon emissions, with the goal of achieving 50% precision chemical production by 2030. Core of cluster development: The project will leverage its role as a \"leader in the industry chain\"; by taking advantage of its infrastructure for refining 10 million tons of crude oil and producing 1.2 million tons of ethylene, it will attract high-end fine chemical and new material projects to settle there, thereby helping Dalian build a world-class green petrochemical industry cluster. Win-win for cities and the ecosystem: Relocation not only creates space for development in Dalian’s urban area and improves environmental quality, but also enables high-quality sustainable development for enterprises by employing advanced processes and low-carbon technologies at the new locations. As various preliminary tasks advance at a rapid pace, the signal for the commencement of the Dalian Petrochemical Xizhongdao integrated refining and chemical project is becoming increasingly clear. This \"giant\" project, with a total investment of 68.5 billion yuan, will not only reshape China National Petroleum Corporation’s refining landscape but will also serve as the key driver for the revitalization of the old industrial bases in the Northeast and for the development of a modern industrial system in Dalian.