Should the Petrochemical Industry Be Controlled?
Year:2009 ISSUE:23
COLUMN:EDITORS NOTE
Click:341    DateTime:Aug.19,2009
Should the Petrochemical Industry Be Controlled?      

In May a proposed 15 million t/a refining integration project jointly planned by Sinopec Group and Kuwait Petroleum Company (KPC) was forced to move to another region from the previously selected site - Nansha of Guangzhou, becoming the second project in China to be re-sited in response to public pressure to protect the environment. A Taron PX project was re-sited from Xiamen in Fujian province many years ago, also owing to pressure from public consensus about its likely environmental impact.     
    This refinery project, approved by the National Development and Reform Commission in 2006, did not pass its environmental impact assessment. The decisive blow came from the Hong Kong environmental department. Nansha is located in the southernmost edge of Guangzhou, central to the Pearl River Delta and very close to Hong Kong. Environmental protection experts of both Guangdong province and Hong Kong asked the government to give up the idea of building a refinery in Nansha.  
    Finally Sinopec Group and KPC signed an MOU on May 11th this year to build the refinery project in another region of Guangdong province rather than in Nansha. The project may be launched in Zhanjiang or Maoming, both in Guangdong province. The Maoming and Zhanjiang governments have both shown interest in hosting the integrated refining project. But given the sensitive concern of the public, these governments have adopted a cautious attitude when facing the media. According to a newspaper, two other cities of Guangdong province, Huizhou and Jiangmen, recently joined in the competitors list to offer a site for this project.  
   These local officials all expect this new complex could accelerate the economic growth of their cities. A 15 million t/a capacity means a production value of RMB150 billion.
   While the local officials are competing for the big petrochemical project, programming experts and environment protectionists are blaming the five existing petrochemical clusters in Guangdong province. A professor of Zhongshan University has found that it is impossible for the petrochemical project to achieve zero emissions, whatever control measures are implemented. The Pearl River Delta is one of the five regions in the world with the most polluted air. Sinopec Group, CNPC, CNOOC, Sinochem, Shell and BP all have major petrochemical plants in the coastal area of this province, which has the most booming manufacturing industry in the country. Strong demand for oil products and chemicals supported the province to develop the petrochemical industry locally.  
   Aside from Sinopec and KPC's project, Guangdong has planned to invest RMB180 billion to construct five petrochemical hubs in five years. In 2008 the province announced ten new projects including a RMB90 billion refinery expansion project in Huizhou and a RMB67 billion refining expansion project in Maoming petrochemical company. Therefore the province, which lacks energy resources, has planned to host a leading petrochemical cluster for Asia. A reporter in the province inquired whether the expansion strategy should be narrowed if the economic recession lasts longer.   
    Some experts question whether China should continue to develop the petrochemical industry so vigorously and place greater expectations on it, even if aimed to balance persistent local shortages. When the crude oil is exhausted, how can China deal with these huge petrochemical facilities?
   A latest news told that the Zhanjiang government agreed to host Sinopec's 15 million t/a project on August 10th, which is subject to approval of the National Development and Reform Commission and the Ministry of Environmental Protection.


Zhong Weike
August 11th, 2009