Mission of the 10 Million T/A Refining Project in Guangzhou
Petrochemical

Sinopec Guangzhou Petrochemical Company Ltd. is an important
petrochemical producer in South China. It takes refining and
ethylene production as the main business and its leading
products include gasoline, diesel, aviation kerosene, naphtha,
heavy oil, LPG (liquefied petroleum gas), toluene and butadiene.
   The 10 million t/a refining renovation project in Guangzhou
Petrochemical Company Ltd. was fully completed in Guangzhou,
Guangdong province on October 13th, 2006. The crude oil
processing capacity was expanded by 8.0 million t/a on the basis
of the original capacity of 7.7 million t/a. (CCR2006, No. 26)
The expansion project has a total investment of RMB4.3 billion.
It mainly includes the construction of 6 refining units such as
hydrocracking, hydrotreating, hydrofining, aviation kerosene
hydrogenation, sulfur recovery and delayed coking, the
renovation of the 8.0 million t/a distillation unit, the
construction of 5 intermediate raw material oil tank farms and
the renovation of some public related utilities.

Market demand

Guangzhou Petrochemical Company Ltd. is located in the high
consumption region of oil products in China and also in the Pearl
River Delta with rapid economic development.
   In July and August of 2005, a supply deficit of oil products
happened that was seldom seen before in Guangdong province,
especially in Guangzhou. The difficulty in the shipment of oil
products from the north to the south caused by typhoons further
aggravated the oil deficit. Guangzhou Petrochemical Company Ltd.
responded to the urgent notice issued by Sinopec and conducted
overload production. The daily amount of oil products supplied
by the company to Guangzhou market was more than 4 000 tons,
accounting for over a quarter of the normal consumption in the
market. The company was also faced with unprecedented
difficulties and huge challenges. Due to the irrational
relationship between the price of oil products in Chinese market
and the price of crude oil in the international market, the more
oil products the company produced, the greater loss it suffered.
Guangzhou Petrochemical Company Ltd. shouldered its social
responsibilities and conducted potential tapping and
performance improving activities at the time of increasing the
processing amount.
   As the demand of oil products in Guangdong province was
rapidly growing, Sinopec decided to enlarge the expansion scale
from 10 million t/a to 13 million t/a.
   The expansion project was launched on July 15th, 2005. Wet
commissioning was successfully conducted in a matter of 25
months, seldom seen in the refining sector in China. In the
course of construction, Guangzhou Petrochemical Company Ltd.
strictly complied with the HSE requirements and not even one
casualty or pollution accident happened.

Great significance

Guangzhou Petrochemical Company Ltd. has become the second 10
million t/a refinery in Guangdong province next to Maoming
Petrochemical Company Ltd. The expansion of the refining
capacity is not only the need in the acceleration of its own
development to enhance competitive edge, but also the need in
the readjustment of the product portfolio in China. It can
optimize the distribution of oil product market resources, ease
the supply deficit of oil products and promoted the development
of extended sectors in the Pearl River Delta. It therefore has
important implications on the industrial development and the
energy strategy in Guangzhou.

Memo of the Refining Expansion Project   

    On August 30th, 2004 the 10 million t/a refining expansion
project was launched.
    On February 8th, 2005 construction were started on the 1.5
million t/a hydrocracking unit, the 2.1 million t/a
hydrotreating unit, the 2.0 million t/a diesel hydrofining unit
and the 1.0 million t/a aviation kerosene hydrogenation unit.
    On December 26th, 2005 the 140 000 t/a sulfur recovery unit
was completed, which was put on stream on February 26th, 2006.
    On March 15th, 2006 the 8.0 million t/a atmospheric and
vacuum distillation unit conducted wet commissioning
    On May 12th, 2006 the 8.0 million t/a atmospheric and vacuum
distillation unit was put on stream
    On May 28th, 2006 the 1.5 million t/a hydrocracking unit,
the 2.1 million t/a hydrotreating unit, the 2.0 million t/a
diesel hydrofining unit and the 1.0 million t/a aviation
kerosene hydrogenation unit were completed and conducted
intermediate handing-over.
    On August 30th, 2006 the 1 million t/a delayed coking unit
was completed and successfully conducted wet commissioning. The
10 million t/a refining expansion unit was completed.