Sinopec upgrades refineries, expands Zhanjiang operations

09 March 2017, Week 09 Issue 633

Sinopec Group will upgrade refineries in Shanghai, Nanjing and Zhenhai on the east coast and Maoming-Zhanjiang in Guangdong Province at a cost of 200 billion yuan (US$29.05 billion). The project is part of a national push to produce better-quality, less polluting fuels.

In a statement Sinopec chairman Wang Yupu said: “It’s a strategic move that fits the global industrial trend for clustered and scaled growth and helps transform China’s petrochemical products to medium and high quality.”

When the renovations are completed in 2020, the capacity of the facilities will be increased by 30% to 130 million tonnes per year (2.6 million bpd). New equipment will be installed to raise ethylene output from 5 million tonnes to 9 million tonnes. They will account for 45% of Sinopec’s total refining capacity and 65% of its ethylene capacity.

The four refineries are expected to generate 800 billion yuan (US$116.2 billion) per year of revenue, based on an oil price of US$54 per barrel. State-owned Sinopec is Asia’s largest refiner.

Work began in December 2016 in Maoming-Zhanjiang, where gasoline and aviation fuel production capacity will be increased at the expense of diesel. The gasoline and diesel produced will meet GB-6 specifications with sulphur content of no more than 10 parts per million. The GB-6 standard is more stringent than Euro-5.

In addition, Sinopec will launch a new tank farm at Zhanjiang in June. Twelve tanks with capacity of 100,000 cubic metres each and three tanks of 50,000 cubic metres will hold 8.5 million barrels of oil, Reuters reported. The company is applying to customs authorities to qualify the facility as a tax-bond site, a Reuters source said.

On the outskirts of Zhanjiang in Lianjiang County, Sinopec is building a strategic petroleum reserve (SPR) site, digging rock caverns that will hold 31.5 million barrels of crude. That facility is expected to be completed in early 2018 and Sinopec will be its operator.

On Donghai Island, 10 km offshore Zhanjiang, Sinopec is building a new plant that will have a throughput capacity of 200,000 bpd and 800,000 tonnes per year of ethylene. Future plans in Zhanjiang include another tank farm and the expansion of the company’s terminal at Zhanjiang Port.

Edited by

Andrew Kemp

Editor

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