Reuters reports that Sinopec Corp is planning to increase its investment in fine chemicals at its Maoming-Zhanjiang refining base in southern China.
Beijing/China — Sinopec announced investment plans with a volume of US$ 29 billion to upgrade four refinery and petrochemical bases during the 13th Five-Year Plan period (2016-20). Reuters quotes a senior executive as saying that the company intends to cooperate with partners such as BASF to move up the value chain. The four refinery and petrochemical bases to be modernized are located in the Maoming-Zhanjiang region, Zhenhai, Shanghai and Nanjing.
"I visited BASF headquarter, where it has 600,000 tonnes of ethylene capacity and 300 units of processing equipment. In Maoming, we have 1.1 million tonnes of ethylene capacity but only 20 units for further processing", said Yu Xizhi, general manager of Sinopec Maoming, on the sidelines of parliament's annual meeting.
"We are seeing a clear trend that refiners are diversifying their products to include fine chemicals. This shift helps them to better deal with oversupply in traditional fuel markets as the glut persists," said Seng Yick Tee, senior director at Beijing-based consultancy SIA Energy.
“It’s a strategic move that fits the global industrial trend for clustered and scaled development and helps transform China’s petrochemical products to medium and high quality,” Sinopec Chairman Wang Yupu said.
Following the upgrade, the total refining capacity of the four bases is expected to reach 130 million tons per year. Moreover, the company anticipates ethylene production at a rate of 9 million tons per year. The bases will make up 17 % of China’s refining capacity and 31 % of its ethylene capacity after the remodeling.