2006-01-05 China Daily
Sinopec wins approval for
The country's biggest oil
refiner Sinopec got the government's go-ahead to build a
US$3.1-billion petrochemical complex in North China's port city
"We received the approval from the State Council on December 21," an official responsible for Sinopec's corporate planning said yesterday, declining to be named.
The Tianjin project, to be completed by 2008, includes a 1 million ton per year ethylene cracker, a refinery able to process 12.5 million tons of crude oil a year, and other facilities to produce petrochemical products such as polyethylene and polypropylene.
Total investment of the project is expected to exceed 25 billion yuan (US$3.1 billion), which will be wholly owned by Sinopec, said an unnamed official from the Tianjin Municipal Development and Reform Commission.
Sinopec officials yesterday refused to further comment on the investment. Zhang Dongsheng, a director in charge of petrochemical projects at the local industrial investment planner, said construction of the new complex is projected to start in the first half of this year, but "it is difficult to predict which month."
Industry analysts say the big capacity of Tianjin port will facilitate the new petrochemical complex to import crude oil and ship its products to markets.
The Tianjin port handled 240 million tons of commodities last year, among the world's top ten ports.
The huge market potential in China's petrochemical sector is attracting both domestic and foreign oil majors including BP, Royal Dutch Shell and Saudi Aramco, to scale up investment in the country.
China in 2004 consumed 16 million tons of ethylene which is widely used in the production of everyday articles from liquid soaps to car components. Domestic production of the petrochemical product stood at 6.27 million tons for the same period, meaning China relies on imports for more than half of its ethylene consumption.
"The current ethylene production facilities under construction are far from enough to meet demand," said Hou Jixiong, a senior oil and gas analyst with Beijing-based Guotai Jun'an Securities Co Ltd.
To cash in on the market, Sinopec's domestic rival PetroChina is also talking with Tianjing city to build a similar-sized petrochemical complex including refining and ethylene production facilities near Sinopec's plant, said Zhang from the Tianjin Development and Reform Commission.
"The talks with PetroChina are still at the very preliminary stage and we can not foresee a timetable to start building another petrochemical complex here," he said.
In the southeastern areas of the country, more refining and petrochemical plants are under way.
The intense investments into the petrochemical sector, however, have also triggered concerns among some market observers that risks still exist for these large-scale capital injections. "A good government censorship and regulation is necessary in the new petrochemical investment, especially when the crude oil prices are high while the domestic prices for refined oil are still capped by the government," said He Jun, a senior analyst with Beijing Anbound Consulting Co.
Sinopec launches Tianjin refining, petrochemical expansion plan
China Petroleum and
Chemical Corp on Monday held a foundation laying ceremony in
northern Tianjin municipality to mark the launch of a Yuan 25
billion ($3.13 billion) refinery and ethylene production
expansion program by its subsidiary Sinopec Tianjin
New York- and Hong Kong-listed Chinese integrated oil group said
on its website Tuesday.
Key refining development projects under the program include building a 10 million mt/year (200,000 b/d) crude topper with vacuum distillation unit, 2.3 million mt/year delayed coker, 1.8 million mt/year hydrocracker, 3.2 million mt/year gasoil hydrofining unit, 1.2 million mt/year hydrotreating unit for waxy oil, 260,000 mt/year sulfur recovery unit, among others.
STC currently operates two sets of crude toppers with vacuum distillation units of 2.5 million mt/year each, 1.2 million mt/year catalytic cracker, 800,000 mt/year hydrocracker, 400,000 mt/year hydrofining unit, and 150,000 mt/year desulfurizer.
Plans for petrochemical capacity expansion include building a 1 million mt/year ethylene plant, which will eventually raise STC's annual ethylene production capacity from the existing 200,000 mt to 1.2 million mt. The group also plans to build a 600,000 mt/year gasoline hydrocracker, a 300,000 mt/year low-density polyethylene unit, a 300,000 mt/year high-density polyethylene unit, a 450,000 mt/year polypropylene unit and other downstream petrochemical production plants.
The entire STC expansion development program is expected to complete in 2009. By then, STC will raise its crude refining capacity by 150% to 12.5 million mt/year, as the company will phase out one existing set of crude topper and vacuum distillation unit.
The entire expansion program is designed to equip STC with sour crude processing capability. The expanded refining capacity will also produce naphtha feedstocks for the new 1 million mt/year ethylene cracker.
STC, in the coastal Dagang port of northern Tianjin municipality, consumes mostly imported crudes.
TIANJIN AN INTEGRAL PART OF SINOPEC'S LOGISTICS SYSTEM
The STC production expansion program is the latest item added to Sinopec's list of infrastructure development in Tianjin.
The Chinese oil group is already developing an integrated crude storage and transportation system in this coastal municipality. It is building a 600,000 cubic meter (3.77 million barrels) crude oil storage facility at Tianjin's Nanjiang Port under a first phase development. The project is expected to be completed by the end of 2007.
The first phase development also involves building a 230-kilometer (143-mile) crude pipeline, connecting the 600,000 cubic meter crude storage facility with Sinopec's Yanshan Petrochemical complex in Beijing. Yanshan Petrochemical operates a 8.5 million mt/year (170,700 b/d) refinery and is a key source of oil products supply to the Chinese capital.
Construction of the pipeline commenced on May 28 this year.
Sinopec last March began building three-berth facility at the Tianjin Port which have a designed handling capacity each of 300,000 dwt-class vessels. Construction completion is also targeted for end-2007.
The Yuan 1.3 billion ($162.1 million) Tianjin berthing facility is jointly owned by Sinopec (50%) and the Tianjin Port (Group) Co (50%).
Pipelines will be built to link up the 600,000 cubic meter crude storage under construction and Sinopec's operating 360,000 cubic meter crude storage facility at the Tianjin Port, according to a Tianjin Port company official.
The Tianjin project forms an integral part of Sinopec's crude logistics system in northern China, the Sinopec official said.
Sinopec's northern China logistics system involves building crude oil storage tanks, berths for crude oil tankers and long-distance pipelines, which link up the group's refineries in Beijing, Tianjin municipality, as well as Tangshan and Shijiazhuang cities in the northern Hebei province.
Meanwhile, Sinopec also plans to build a 800,000 cubic meter central crude terminal station at Tianjin's Dagang near to the STC complex, which will serve as a buffer among storage facilities in Beijing, Tianjin, Tangshan and Shijiazhuang.
Sinopec launches trial
runs at 160,000 b/d Hainan refinery
Chinese state-owned giant Sinopec Friday began trial runs at its 8 million mt/year (160,000 b/d) greenfield refinery and petrochemical complex in China's southern island province of Hainan.
"We have begun a trial run to test all the units before the refinery begins commercial operation," a refinery official said. "Some oil products were expected to be brought out in late August or early September," he added.
Sinopec had originally planned to start trial operations at the end of June, which was delayed due to longer-than-expected initial test procedures of the units.
The Sinopec Hainan Petrochemical Co's refinery, located in Hainan's northwestern coastal Yangpu Economic Development Zone, cost more than Yuan 10 billion ($1.25 billion) to develop. Construction began in April 2004.
For the trial run, Sinopec had already received 274,173 mt of sweet Angolan crude in May. Moreover, Sinopec has also secured an Arab light crude cargo due to arrive in Hainan refinery in August.
The refinery has a designed annual production capacity of 482,800 mt of LPG, 200,000 mt of jet fuel, 3.86 million mt of gasoil, 138,900 mt of fuel oil and 2.44 million mt of RON 93, RON 95 and RON 97 gasoline which meets Euro III emissions standards.
The complex has 15 refining and petrochemical units including an 8 million mt/year crude distillation unit, 2.5 million mt/year vacuum distillion unit, 2.8 million mt/year heavy oil catalytic cracker, 1.2 million mt/year continuous reformer, 2 million mt/year gasoil hydrogenation unit, 300,000 mt/year jet fuel hydrogenation unit, 60,000 mt/year gas fractionation unit, as well as facilities producing isomers, polypropylene, and MTBE.