By Liu Bingjuan, Oilchem

As domestic oil refineries scramble for transforming towards refining-chemical integration, the integration projects, which are dominated by seven major petrochemical industrial bases, are gradually launched, first by Hengli Petrochemical Co., Ltd. and Zhejiang Petrochemical Co., Ltd.sequentially in 2018 and 2019, then by Shenghong Refinery and Chemical Co., Ltd. and Guangdong Petrochemical Co., Ltd. in 2022.

Shandong region, which initially was not a part of seven major petrochemical industrial bases, also adapted to the trend, building Yulong Petrochemical Co., Ltd. in Yantai city through the integration. The approved oil capacity of 20 000 000 t/a from Yulong Chemical Co., Ltd. is projected to be put into operation in 2024.

Seven petrochemical projects hold most of new capacity

From 2017 to 2022, domestic refining capacity grew steadily, especially for private enterprises with one-time capacity launch of total 110 000 000 t/a and 78 500 000 t/a for key products. And the majority of new capacity was occupied by seven petrochemical industrial bases. It is predicted that as of 2025 refining capacity from seven petrochemical bases will be responsible for 40% of overall capacity (See Table 1).

Apart from the seven petrochemical industrial bases, the most well-known refining-chemical integration project is from Yulong Petrochemical Co., Ltd. It was in 2022 that 10 refineries involved in the integration completed the demolition. Meanwhile, the capacity of 7 400 000 t/a was deleted, which came from Chengda Energy Technology Co., Ltd., Haike Chemical Group Co., Ltd., and Kelida Petrochemical Co., Ltd. (See Table 2).

Four new trends of refining development

The capacity domestically will increase to 123 000 000 t/a if new equipment can be put into operation as schedule between 2023 and 2030. The total outdated capacity including phase 2 project of Yulong Petrochemical Co., Ltd. will be around 60 000 000 t/a, which will be converted to new capacity of 60 600 000 t/a (See Table 3).

The demand of petrochemical products surges as new energy vehicles and people’s quality expectations improve. Domestic petrochemical industry at present is going through tremendous changes and increasing refining-chemical integration projects, which show up following four trends:

Firstly, regulate the transfer from oil refining to organic chemicals. The rising living standards ramp up the need for organic chemicals, especially basic products including ethylene, propylene and aromatics, the capacity of which is insufficient to back up the development of refining-chemical integration.

Secondly, integrate refineries and develop in the direction of park and industrial bases. Integrate low-capacity refineries, delete overcapacity, respond to the call of government, and launch new projects in seven petrochemical bases (Changxing Island in Dalian City, Caofeidian District in Hebei Province, Lianyungang City in Jiangsu Province, Caojing Town in Shanghai City, Huizhou City in Guangdong Province, Gulei Town in Fujian Province, Ningbo City in Zhejiang Province). Among them, Zhejiang Petrochemical Co., Ltd. is located in Zhejiang Ningbo Yushan Island base, and Hengli Petrochemical Co., Ltd. is located in Dalian Changxing Island base. It is predicted that by 2025, the refining capacity of the seven petrochemical bases will own 40% of the country's total capacity.

Thirdly, conventional and multidimensional integration coexist with each other. Conventional integration is referred to as “Oil head, and chemicals tail”, indicating that it starts with crude oil and ends with chemicals. Nowadays, the refining-chemical integration is progressing towards diversification. Refineries demand for hydrogen, gas-electric and cogeneration, coupled with growing second-energy demand of electricity in today and future, further drives the integration of refinery, power generation and vapor. 

And fourthly, the continuous advances of technology develop in depth. Since this year, ExxonMobil, Saudi Arabia and SABIC have all developed crude-to-olefins projects, propelling the growth of refining-chemical integration in new territory. Saudi Arabia and SABIC are conducting the project of crude oil-to-chemicals in Yenbu, with annual output of 14 000 000 tons of chemicals whose conversion rates are around 50% to 70%.

Nowadays, refining-chemical integration is growing extensively against new background, revealing new models and development trends. Optimized enterprise resources, increasing low-cost advantages, and mounting products’ added value all promote the upgrading of oil refining industry.