[Headline] One year after the implementation of the transformation and upgrading plan: An overview of the achievements of Shandong’s local refineries

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【Headline】One year after the implementation of the transformation and upgrading plan: An overview of the achievements of Shandong’s local refineries 【Headline】One year after the implementation of the transformation and upgrading plan: An overview of the achievements of Shandong’s local refineries. The content is reproduced from a public account. China Chemical Industry News. 　　 More than a year has passed since the implementation of the \"Implementation Plan for the Transformation and Upgrading of the Local Refining and Chemical Industry in Shandong Province,\" and remarkable achievements have been made in various areas – such as the phasing out of outdated production capacity, crude oil imports, refined oil exports, as well as improvements in management levels and technological innovation – achievements that have caught the attention of the entire refining and chemical industry across the country. This is what the author learned last week while conducting a survey on the achievements of the \"Plan\" one year after its implementation. 　　Qingdao Port’s 300,000-ton crude oil terminal. (Photo provided by CFP) Industry consolidation: 43.02 million tons of production capacity will be phased out. The local refining industry is one of the key industries in Shandong Province, but severe overcapacity is hindering its healthy and sustainable development. 　　“Since the implementation of the Plan, the local refining industry has accelerated the phasing out of outdated production capacity. By the end of July, 16 enterprises had passed the on-site inspections conducted by the National Development and Reform Commission; a total of 59 outdated production units were phased out, representing an annual production capacity of 43.02 million tons. Among them, 40 outdated units within the province were phased out, resulting in a total production capacity of 33.3 million tons per year ； 19 outdated units from outside the province were phased out, resulting in a total production capacity of 9.72 million tons per year. Two more local refining companies have passed the written review; it is expected that 3 outdated production units will be phased out, resulting in a total capacity reduction of 1.9 million tons per year. ” As introduced by Li Dekun, secretary-general of the Shandong Petroleum and Chemical Industry Association. 　　Eliminating outdated production capacity injects vitality into corporate development; the most significant change is the substantial increase in capacity utilization, along with a notable rise in the output of refined oil, a trend that was already evident in the data from 2015. Last year, the capacity utilization rate of the local refining industry in Shandong Province reached 53%, an increase of 26 percentage points compared to 2013. The 11 local refineries that obtained the permission to use imported crude oil in 2015 saw the most significant increase, with their capacity utilization rate reaching 78%, an increase of 38 percentage points compared to 2013. In 2015, the domestic refining industry processed 68.89 million tons of crude oil and fuel oil, producing a total of 42.39 million tons of gasoline and diesel – figures that represented increases of 68% and 81.6% respectively compared to 2013. It thus met, ahead of schedule, the targets set for 2017, which were 60 million tons in terms of processing volume and 35 million tons in terms of gasoline and diesel production. 　　Meanwhile, the operating conditions of enterprises have improved, and economic efficiency has seen a notable rise. Last year, the domestic refining industry generated main business revenue of 439.7 billion yuan, a 30.9% increase compared to 2013 ； The total profit and tax amount reached 22.4 billion yuan, a 6.6% increase compared to 2013 ； The total profit reached 12.5 billion yuan, a 150.6% increase compared to 2013. 　　Shandong Qingyuan Group Co., Ltd., which was granted permission last week to use imported crude oil, has a high-pressure hydrogenation plant with an annual capacity of 600,000 tons. (Photographed by Wang Weichen) Crude oil imports: A quota of 56.89 million tons has been allocated. At present, significant progress has been made in the process of applying for crude oil imports by local refining enterprises in Shandong Province. By the end of July, a total of 16 local refineries had passed the on-site inspections conducted by the National Development and Reform Commission (13 of these enterprises obtained official approval to use imported crude oil). They received a total of 56.89 million tons in import quotas for crude oil; they had 21 refining units in operation, with a combined annual production capacity of 65.8 million tons, meaning that each unit had an average annual capacity of 3.13 million tons. In addition, the application materials from 2 other companies have been submitted to the **National Development and Reform Commission for review and approval; they have requested import quotas for 4.364 million tons of crude oil, along with 2 processing units, resulting in a total production capacity of 5.8 million tons per year. 　　“It is expected that by the end of 2016, 18 local refining enterprises in our province will have obtained the permission to use imported crude oil. They will be allocated a total of 61.26 million tons of such crude oil, and they will have 23 refining units available to them, resulting in an overall production capacity of 71.6 million tons per year. By then, the operational conditions of these local refining enterprises in Shandong Province will improve further. ”Xiao Wenhua, a researcher at the Economic Operations Bureau of the Shandong Provincial Commission of Economy and Information Technology, revealed. 　　Furthermore, to strengthen industry self-discipline and establish an organized and well-managed system for the procurement of imported oil, the China (Independent Refineries) Oil Procurement Alliance was established in Jinan on February 29. After its establishment, the alliance organized a series of themed events in March, April, May, June, and July, including “A Visit to Dongming Petrochemical,” “A Visit to Singapore,” “A Visit to Qingyuan Group,” “A Visit to Tianhong Chemical,” and “A Discussion on Strategies for Procurement in Jinan,” aiming to help its member companies understand the trends in the international crude oil market and the development of the global petrochemical industry, thereby enhancing their ability to purchase crude oil internationally. 　　“By the end of July, 19 local refining companies had joined the alliance, with a combined annual production capacity of 77 million tons; they applied for import quotas for 55.72 million tons of crude oil. Among them, there are 16 companies within the province; 14 of these have passed the on-site inspections and written reviews, and have applied for import quotas of 46.63 million tons of crude oil ； There are 3 companies from outside the province, 2 of which have passed the on-site inspections and written reviews, and have applied for import quotas of 9.09 million tons of crude oil. ”As explained by Zhang Liucheng, the rotating chairperson of the Petroleum Procurement Alliance* and vice president and director of Dongming Petrochemical Group. 　　Finished oil exports: A historic breakthrough has been achieved. Having obtained the qualification to use crude oil, it is of great significance for enterprise development to be able to get the qualification for importing crude oil through non-state trade as well as the qualification for processing imported materials and re-exporting them. 　　“Last year, Dongming Petrochemical exported 10,000 tons of gasoline, marking the first time that a local refining enterprise in our province has achieved exports of refined oil products. In the first three quarters of 2016, a total of 8 local refining companies in our province applied for export quotas for refined oil products amounting to 985,000 tons; of this amount, 805,000 tons were allocated for gasoline exports and 180,000 tons for diesel exports. Shandong’s local refining enterprises have taken another encouraging step forward. ”Introduced by Li Dekun. 　　To date, all 11 enterprises in Shandong Province that were granted the authority to use imported crude oil in 2015 have obtained the authority to import crude oil through non-state trade channels. At the same time, the Shandong Provincial Department of Commerce has actively applied to the Ministry of Commerce to adjust the current system for crude oil processing trade as soon as possible, to issue relevant guidelines and measures to allow local refining enterprises to engage in such trade, and to approve qualified enterprises to carry out business involving the processing of crude oil imported for re-export. 　　Moreover, the local refining industry in Shandong Province focuses its efforts on transformation and upgrading on improving product quality. By carrying out technological upgrades to existing gasoline hydrogenation and diesel hydrogenation units, it optimizes the overall production processes and installs facilities for continuous reforming and alkylation aimed at producing high-grade gasoline components, while also improving the associated supporting infrastructure. 　　“To ensure the smooth progress of product upgrading, the Shandong Provincial Finance Department provided interest subsidies to 26 local refining enterprises through two rounds of financing support, totaling 193.55 million yuan in subsidy funds. At present, the total hydrogenation refining capacity for gasoline and diesel in Shandong Province’s local refining industry amounts to 50 million tons per year. Of this, 18 key enterprises have a combined hydrogenation refining capacity of 37 million tons per year. By the end of 2015, all facilities had achieved the National V standard for oil quality, ensuring a supply of National V gasoline and diesel in the province starting from January 1, 2016. ”Li Dekun said. 　　In addition, local refining enterprises in Shandong Province have optimized the structure of their existing facilities and continuously improved their secondary processing methods; process technologies and equipment such as wax oil hydrogenation, residue hydrogenation, and continuous reforming have been put into use. On the one hand, this ensures that the produced gasoline and diesel meet **new standards**, and on the other hand, it makes full use of the raw materials to maximize efficiency. 　　According to Li Dekun, Shenchili Chemical has built a 700,000 tons per year residue hydrodesulfurization unit, and by utilizing Chevron’s advanced technology, it has constructed China’s first residue fluidized bed hydrocracking unit ； Dongming Petrochemical and Jincheng Petrochemical have respectively built wax oil hydrocracking units with capacities of 2 million tons per year and 2.2 million tons per year ； The reforming units under construction at Jincheng Petrochemical, Tianhong Chemical, and Shengxing Chemical will be put into operation one after another, resulting in progress in the adjustment of the industry structure. 　　Outside a local refinery complex, long queues of large oil tankers transporting crude oil and refined products lined up. (Photographed by Yang Yang) Management Improvement Greater progress in safety, environmental protection, and energy conservation In the process of transformation and upgrading, the local refining industry in Shandong has been continuously improving its management standards, achieving new advancements in areas such as safety, environmental protection, and energy conservation. 　　In terms of safety work, Shandong’s local refineries are making efforts to improve conditions for safe production. 　　“All 18 key domestic refining enterprises have passed the assessment for meeting safety production standards as hazardous chemicals handling units. They have comprehensive safety production management systems and fire safety management systems, and have established full-time or volunteer fire teams appropriate to their production and storage scales as well as the level of risk involved. They are equipped with the necessary personnel, vehicles, and equipment in accordance with relevant standards, and no major or more serious safety production accidents or fire incidents have occurred in the past three years. ”Li Dekun said. 　　In addition, enterprises actively adopt advanced and appropriate technologies to upgrade their facilities, further reducing pollutant emissions. Jingbo Petrochemical, Binyang Combustion & Chemical, and Hualian Petrochemical have adopted desulfurization technologies from companies such as Berger and Norton to upgrade their catalytic cracking units and heaters, thereby reducing the emissions of sulfur dioxide and nitrogen oxides in flue gases. Taking Yatong Petrochemical as an example, the concentrations of sulfur dioxide, nitrogen oxides, and dust in the flue gas, as well as the COD and ammonia nitrogen levels in the wastewater, all decreased by 20%, resulting in a significant improvement in the environmental conditions. 　　It is particularly remarkable in terms of energy conservation. The local refining industry in Shandong has improved its operational control and energy-saving capabilities by optimizing and upgrading the heat exchange systems in its facilities. For example, air preheaters have been upgraded, heating furnaces have been coated with nanometer-level high-radiance coatings, and waste steam as well as low-temperature heat are recycled. Additionally, energy-saving technologies and equipment such as energy-efficient motors, steam turbines, hydraulic turbines, and variable-speed gas flow control for compressors are widely used. 　　Among them, the heat pump technology developed jointly by Japanese company Kawasaki and Tsinghua Tongfang, for which HSBC Petrochemical invested 60 million yuan, can supply heating to residents in an area of 3.6 million square meters in the urban area; it helps save approximately 29,400 tons of standard coal per year, generating profits of over 58 million yuan ； Hengyuan Petrochemical’s 15,000 cubic meter hydrogen production converter utilizes the flue gas waste heat recovery system from Ruichang Petrochemical, generating annual earnings of around 4.5 million yuan; the heating efficiency of this converter reaches 92%, showing excellent performance. 　　“At present, the key domestic refineries have met the domestic oil refining technical standards, achieving or exceeding **industry standards; their comprehensive energy consumption per unit of refined oil is less than 66 kilograms of standard oil per ton, the energy consumption per unit of energy factor is no more than 11.5 kilograms of standard oil per (ton·energy factor), the processing loss rate is less than 0.6%, and the fresh water consumption per ton of oil is less than 0.5 tons. ”said Deng Zhaojun, head of the Energy Conservation Office in Shandong Province. 　　A corner of the hydrogenation unit at Shandong Huaxing Petrochemical Group. (Photographed by Li Wenfeng) Technological innovation: The introduction of external technologies and independent research and development go hand in hand. “In the process of transformation and upgrading, the biggest highlight is that enterprises have strengthened both the introduction of advanced technologies and the enhancement of their own R&D capabilities.” New technologies that are at the international leading level have been adopted and applied in the local refining enterprises in our province, resulting in a significant improvement in the level of technology and equipment; in particular, the technology for the deep processing of heavy oil is at the leading level in China. ” Li Dekun said. 　　It is understood that internationally leading technologies such as ultra-clean oil production processes, continuous reforming technology, and alkylation technology have been widely adopted in the local refining industry in Shandong Province. Among them, HSBC Petrochemical collaborated technically with two major international companies, Lummus and Albemarle from the United States, to build the world’s first industrial demonstration plant for solid-acid alkylation ； Hengyuan Petrochemical built the first domestically produced continuous polypropylene production facility, as well as the first facility in China to use TMP technology to process pure coker wax oil in order to produce propylene and high-octane gasoline ； Dongming Petrochemical adopted the FDFCC technology to build China’s first catalytic cracking unit ； Shenchi Chemical constructed China’s first fluidized-bed residue hydrogenation unit. Several other companies have built C4 alkylation and C5, C6 isomerization units, laying the foundation for upgrading the quality of refined oil to National VI standards. 　　At the same time, local refining enterprises in Shandong Province are striving to develop deeper processing to extend the industrial chain. Jingbo Petrochemical’s technology for producing butyl rubber using the Conser process is at the world’s leading level in terms of raw materials and auxiliary substances, utility consumption, and product quality control ； Dongming Petrochemical utilizes the advanced C3 and C4 mixed hydrocarbon dehydrogenation technology from UOP in the United States, enabling it to produce propylene with a purity level suitable for epoxy applications ； Lihuayi Group has constructed facilities for the production of butanol and 2-ethylhexanol, phenol and acetone, and bisphenol A. These developments have further enhanced the degree of lightening and olefinization within the industry, providing a raw material foundation for the expansion of the chemical industry chain. 　　“While vigorously introducing advanced technologies from home and abroad, local refining companies also continue to carry out independent research and development of new technologies. By the end of 2015, the local refining enterprises in our province had 1 academician workstation, 4 postdoctoral workstations, 5 enterprise research institutes, and 7 provincial-level technology centers. ”Introduced by Li Dekun.