Prospect of China's Petroleum Industry
                  in the Early 21st Century
                Zheng Ninlai Research Institute
              of Yangzi Petrochemical Corporation
1. Development strategy of China's  petrochemical  industry
by year 2010
The petrochemical industry is one of the pillar  industries
in China. The state has proposed a strategy  of  two- step
development of the petrochemical industry in the next 5  -
15 years.
The first step  ( to  year  2000)   is  mainly  to  conduct
technical renovation to existing enterprises,  remove  the
constraints  of  "bottlenecks"  and  take  on  a  road  of
intensive development.
The second step (to year 2010) is to construct a  group  of
large and modern world-class petrochemical  units  besides
continuing to conduct technical renovation  and  expansion
to existing petrochemical units. China  will  construct  a
group 10 million t/a refineries and 1 million t/a ethylene
plants. 1 million t/a ethylene plants will be  constructed
in Yangzi Petrochemical Corporation, Yanshan Petrochemical
Corporation and Shanghai Petrochemical Co., Ltd. .   ( See
Table 1 and Table 2 for detail)
2. Petrochemical units planned to be  constructed  by  year
2010
The development of China's ethylene industry in 2000 - 2010
will mainly  rely  on  the  construction  of  world- class
ethylene units with economic scale. The capacity of  these
units will be 300 000 - 800 000 t/a, chiefly 450 000 - 600
000 t/a. The new ethylene units will  be  integrated  with
oil refining units. They will be constructed at  the  same
locations  to  ensure  the  raw  material  supply  of  the
ethylene units.
Following is a brief introduction of the ethylene units and
associated chemical units planned  to  be  constructed  in
China based on the data available.
(1) 450 000 t/a ethylene unit in Liaoning
The  6  Japanese  companies  including  Mitsubishi,   Itoh,
Marubeni, Sumitomo and Nissho-Iwai signed an agreement  in
1993 with Liaoning Province,   the  Ministry  of  Chemical
Industry, China Petrochemical Corporation and China Oil  &
Natural Gas Corporation  on  constructing  a  large  joint
venture petrochemical project in  Liaoning.   The  project
includes a 16 - 17 million t/a refinery,  a  450  000  t/a
ethylene unit and units of more than 10  synthetic  resins
such as PP, PE and PS. The total investment of the project
is around 4 billion U.S. dollars. The  investment  of  the
Japanese side accounts for 51%  of  the  total,   and  the
investment of the Chinese  side  accounts  for  49%.   The
project is expected to be completed and put into operation
in 1999 - 2000.
(2) 450 000 t/a ethylene project in Shandong Qingdao
The petrochemical industry in Qingdao already has a history
of 30 years. The oil refining capacity  in  the  city  has
  reached  2. 5  million  t/a.   The  development  of   the
petrochemical industry will mainly be based on refinery gas.
In the development strategy of China's chemical industry in
the next 5 - 15 years formulated by the former Ministry of
Chemical Industry, Qingdao is defined to be one of the two
state-class comprehensive chemical  bases.   The  chemical
industry based on petrochemicals  and  soda  ash  will  be
formed in the city. In the development  program  of  major
products during the Ninth Five-year  Plan  period  and  to
year 2010 in Qingdao, the development of petrochemicals is
a priority. The petrochemical sector is requested  to  use
foreign capital to construct a 10 million t/a refinery and
a 450 000 t/a ethylene project to form a  15  million  t/a
capacity of  crude  oil  processing  and  a  600  000  t/a
capacity of three major kinds of  synthetic  materials  at
the end of the Ninth Five-year  Plan  period.   The  early
preparations of the refinery and the ethylene project  are
in progress. The units of three major kinds  of  synthetic
materials are at the stage of planning.
(3) 600 000 t/a ethylene project in Tianjin
China Petrochemical Corporation and  Dow  Chemical  of  the
United States will construct a joint venture 600  000  t/a
ethylene unit in Tianjin.   The  unit  will  be  based  on
Tianjin Petrochemical Corporation.
It is reported that Tianjin will establish China's  biggest
chemical industrial Zone. The total area will  be  30  km2
and the investment will be nearly 10 billion U.S. dollars.
The initial area of 2 km2 will be completed in  2000  with
an investment of 1.1 billion  U. S.   dollars.   12  units
including a 200 000 t/a PVC unit, a 50 000 t/a epoxy resin
unit, a 100 000 t/a  polystyrene  unit,   a  100  000  t/a
phenol/acetone unit, a 50 000 t/a propylene oxide unit and
a 50 000 t/a caustic soda unit, as well as some associated
facilities, will be constructed in the area.   The  annual
sales revenue will be 800 million U.S.   dollars  and  the
annual profit and tax will be 180 million U. S.   dollars.
The development area of 10 km2 will be completed  in  2005
with an investment of 5 billion U.S. dollars.  A  600  000
t/a ethylene unit  and  a  10  million  t/a  oil  refining
project will be constructed in the area. The annual  sales
revenue will be 3.2 billion U.S. dollars  and  the  annual
profit and tax will be 700 million U.S. dollar