German China India

Renewal of the Chinese Chemical Industry

The Chinese Province of Jiangsu: Shutdown of Nine Chemical Parks

| Editor: Gerd Kielburger

The government of Jiangsu province decides on massive modernization and wants to close nine chemical parks in the province.
The government of Jiangsu province decides on massive modernization and wants to close nine chemical parks in the province. (Source: Location of province in jiangsu / TUBS / CC BY-SA 3.0)

China's government takes safety and environmental protection seriously and closes a number of chemical parks in Jiangsu Province. This affects a total of 1,431 chemical companies, some of which are considered major environmental polluters. A huge wave of production closures, modernizations and relocations is imminent.

Beijing/Jiangsu — PR China — According to the latest information from the China Petroleum and Chemical Industry Federation based in Beijing on 20 September 2019, the government of Jiangsu Province has given the go-ahead for a huge wave of modernization in the Chinese chemical and petrochemical industry.

The Department of Implementation and Modernization of Environment and Security of the Provincial Government of Jiangsu published a notice that nine chemical parks in the province are losing their current status. In addition, a large number of companies in the area have to be upgraded, modernized or relocated to state-of-the-art production levels. Many will have to shut down completely.

The provincial government's list of companies to be modernized includes 4022 chemical production companies. A total of 1431 companies would be 'phased out'. Accordingly, 267 will have to cease production completely for the modernization and 1,302 will have to be completely overhauled within a limited period of time. Furthermore, 77 companies must be relocated and 945 modernized.

The goal of Jiangsu Province is to close 579 chemical companies and nine chemical parks (clusters) in 2019 or to eliminate the 'positioning' as chemical parks. The following chemical parks are affected by this:

  • Jiangyin High-Tech-Chemie-Cluster (Wuxi),
  • Chemie-Industrie-Cluster Kunshan Zhangpu East Industrial Park (Suzhou),
  • Haimen Lingdian Chemical Park(Nantong),
  • Qidong Binjiang Fine Chemical Park (Nantong),
  • Chemie-Cluster der Hongze Economic Development Zone (Huaian),
  • Xiangshui Ecological Chemical Park (Yancheng),
  • Chemical Cluster of Funing Hi-Tech Industry Development Zone (Yancheng),
  • Zhenjiang Dantu District Gaozi Chemical Park

The paper available to PROCESS also states that 'teapot' refiners in Dongying, Zibo, Rizhao, Dezhou, Binzhou and other Shandong cities have recently reached a consensus on integration. 'Teapot refineries' are private and therefore independent producers. They have relatively small capacities ranging from 20,000 barrels of oil per day (bpd) to 100,000 bpd.

What the New Era of Made-in-China 2025 means for Petrochemicals and Chemicals

Made-in-China 2025

What the New Era of Made-in-China 2025 means for Petrochemicals and Chemicals

With China pushing into a new era of industrialisation, chemicals and petrochemicals are especially affected. While the size of the sector is enormous, innovation ability, efficiency and integration is not quite often not on-par with the global competition. Can the ‘Made in China 2025’ herald a new dawn for Asia’s chemical and petrochemical industry? more...

About 80% of these small refineries are located in Shandong. Experts estimate that this accounts for about a quarter of China's total refining capacity. Shandong's teapot refineries are able to crack indigenous mixtures of crude oil, fuel oil and petroleum bitumen. Since 2013, refineries have been using less imported fuel oil due to rising procurement costs. The product range of the refineries consists mainly of petrol including petrol for sale on the domestic market.

The data show that the nine companies processed a total of 15.36 million tonnes of crude oil per year in 2018. At the same time, they produced 4.37 million tonnes of crude oil and 7.46 million tonnes of petrol and diesel. The nine refineries at local oil refineries in Shandong Province are expected to reduce their production capacity by 25 million tonnes per year in line with the 1:1.25 reduction in production capacity ratio.

In addition, there was the commissioning of mega-refineries in Dalian and Zhejiang and a plan by the central government to rationalize exports. As a result, the teapot refineries have not received quotas for the sale of fuel abroad since 2017.

The Jiangsu Provincial Government's announcement sets targets for the conversion and upgrading of the local refining industry. The refinery capacity of teapot refineries in densely populated urban areas and those with a refinery capacity of three million tonnes/year or less will be integrated and transferred by 2022. By 2025, the refinery capacity of teapot refineries with an annual capacity of 5 million tonnes or less will be integrated and transferred step by step. The processing capacity of crude oil in the province's local refinery industry is to be reduced from the current 130 million tonnes/year to around 90 million tonnes/year.

The exchange of many small refineries for a few large plants is connected with the aim of promoting the integration of refining and chemistry as well as the development of high-end and fine chemical projects.

According to the paper, the implementation should be proportional. This means that new refinery capacities of 40 million t/a will be used and obsolete capacities of 50 million t/a will be eliminated. This corresponds to an annual capacity of 20 million tons of the first phase of the Yantai Yulong refinery and makes room for major projects. Industry insiders believe that numerical agreement is more of a coincidence.

Comments are being loaded ....

Leave a comment

The comment is checked by an editor and will be released soon.

  1. Avatar
    Avatar
    Edited by at
    Edited by at
    1. Avatar
      Avatar
      Edited by at
      Edited by at

Comments are being loaded ....

Report comment

Kommentar Freigeben

Der untenstehende Text wird an den Kommentator gesendet, falls dieser eine Email-hinterlegt hat.

Freigabe entfernen

Der untenstehende Text wird an den Kommentator gesendet, falls dieser eine Email-hinterlegt hat.

copyright

This article is protected by copyright. You want to use it for your own purpose? Contact us via: support.vogel.de/ (ID: 46164544 / Business & Economics)