Corrected: China to beef up ethylene capacity by 82% in three years

26 May 2009 07:37  [Source: ICIS news]

Correction: In the ICIS news story headlined “China to beef up ethylene capacity by 82% in three years” dated 26 May 2009, please read in the accompanying table regarding Tianjin PC that the launch of full production is in end-November 2009 … instead of … end-November 2011 … A corrected story follows.

By Becky Zhang

SHANGHAI (ICIS news)--China’s ethylene capacity would likely grow 82% to 17.84m tonnes/year over the next three years with the help of the fiscal stimulus package dedicated to the petrochemical sector, industry sources said on Tuesday.

The additional capacity will come from five new crackers and six cracker expansions projects that would be completed from this year to 2011, most of which were being carried out by subsidiaries of state-owned refiners Sinopec and PetroChina.

(Please see the table below on cracker project updates compiled by CBI based on interviews with respective companies)

About 45% or 3.56m/ tonnes of the expected capacity increase would come in this year, starting off with the new 800,000 tonne/year cracker of Sinopec unit Fujian Refining & Petrochemical (FREP) that will be launched in July.

Also in July, Shanghai Secco Petrochemical’s cracker would have added 300,000 tonnes/year in new capacity to 1.2m tonne/year.

Tianjin Petrochemical, another subsidiary of Sinopec, would have a major ethylene capacity increase of 1m tonnes/year in November and December to 1.2m tonnes/year.

PetroChina unit Dushanzi Petrochemical was also expected to boost its ethylene capacity by the same magnitude to 1.22m tonne/year at around the same time.

By the end of 2009, Huajin Chemical Industrial Group would have also raised its cracker capacity by  460,000 tonne/year to 620,000 tonnes/year.

In 2010, ethylene capacity in China would be raised further by 1.3m tonnes/year with the launch of Sinopec subsidiary Zhenhai Oil Refining and Chemical (ZRCC)’s 1m tonne/year cracker in April to May and Baotou Shenhua Coal Chemical’s new 300,000 tonnes/year ethylene plant coming on stream in the second half.

Another 3m tonnes/year in ethylene capacity will come on stream in 2011, with the expected start-ups of two new crackers and two other capacity expansion.

PetroChina unit Fushun Petrochemical would also boost its cracker capacity by 800,000 tonnes/year in the first half of 2011, while Sichuan Petrochemical would have a new 800,000 tonnes/year cracker by the end of that year.

Sinopec’s Wuhan Petrochemical will further augment China’s ethylene capacity by 800,000 tonnes/year while PetroChina unit Daqing Petrochemical will doubled its ethylene capacity to 1.2m tonnes/year by the end of 2011.

The last two companies have some reservations on the scheduled start-ups, citing slow progress on the projects, industry sources said.

“We expect the completion of the project would be in 2012 based on current status; however, earlier launch would also be possible if everything goes smoothly under government’s support,” said a source from Wuhan Petrochemical.

The Chinese government had unveiled last week the specific targets on what its petrochemical stimulus plan aims to achieve three years down the road.

It hopes the government funds would ensure stable growth in the industry by boosting the country’s crude oil processing capacity to 405m tonnes and increase its ethylene output o 15.5m tonnes by 2011.

Company	Types of Company	Ethylene Capacity t/yr	Derivatives Capacity t/yr	Expected Cracker Launch Date	Current Progress
FREP	Fujian PC, ExxonMobil, and Saudi Aramco by 50%:25%:25%	800,000	800,000 Polyethylene (PE) 400,000 Polypropylene (PP) 300,000 Benzene 700,000 Paraxylene (PX) 70,000 Methyl Tert-Butyl Ether (MTBE)	July 2009	* aromatics plant has started up in mid-May 2009, current operating rate was around 30% * PE and PP plants undergoing solo test runs and will have integrated trial runs with cracker in June
Secco	Sinopec, Shanghai PC and BP by 30%, 20%, 50%	300,000	150,000 Styrene (SM)	July 2009	* cracker and PE plans were shut on 20 May 2009 * PP unit will come to a halt shortly * shutdown likely to last 60 days * cracker capacity would reach 1.2m tonnes/year after debottlenecking is completed
Tianjin PC	Sinopec and Sabic were discussing 50% and 50% share plan, which was still waiting for the approval from the Chinese government.	1,000,000	300,000 High Density PE (HDPE) 300,000 Linear Low Density PE (LLDPE) 450,000 PP 420,000 Mono Ethylene Glycol (MEG) 350,000 Phenol / Acetone 210,000 Benzene 500,000 SM	November 2009	* trial run scheme for cracker and its derivative units initially approved * whole project under testing * launch of full production in end-November 2009 * Tianjin’s cracker capacity would reach 1.2m tonnes/year upon completion
Dushanzi PC	PetroChina	1,000,000	550,000 PP 600,000 Low Density PE (LDPE) 300,000 HDPE 240,000 Benzene 320,000 SM 130,000 Polystyrene (PS) 100,000 Styrene-Butadiene Rubber (SBR) 80,000 Styrene-Butadiene-Styrene (SBS)	November-December 2009	* fully entered into the pre-commissioning stage after core equipment pyrolysis gas compressor successfully tested in mid-May * plans to start test run for cracker, PE, and PP units in September to October 2009 * final launch date to depend on trial runs (normally last between one to months) and market condition * Dushanzi’s racker capacity would reach 1.22m tonnes/year upon completion
Huajin Chemical	State-owned local company	460,000	250,000 PP 300,000 HDPE 150,000 SM Also has aromatics plants for Benzene/Toluene/Xylene (BTX), Butadiene, PS, Acrylonitrile Butadiene Styrene (ABS)	End of 2009	* fully finished facility installation in May 2009 * now fastening set-up of pipework, electric and measuring instruments * Huajin’s cracker capacity would reach 620k tonnes/year upon completion
2009 total ethylene capacity expansion   3,560,000 tonnes/year
ZRCC	Sinopec	1,000,000	650,000 MEG 450,000 LLDPE/HDPE swing plant 300,000 PP 150,000 Butadiene 500,000 BTX JV with US Lyondell：280,000 propylene oxide, 600,000 SM, 100,000 propylene glycol (PG)	April-May 2010	* detailed plan finished, now in site construction phase * installation works expected to be finished in November 2009 * PE plant will then start solo test run * final launch date should come six months after the start-up of the Tianjin project  to prevent competition within Sinopec system
Baotou Shenhua	Shenhua Group	300,000	1,800,000 Methanol-to-Olefins (MTO) 300,000 PE 300,000 PP byproducts: 94,000 Butadiene, etc.	2H of 2010	* under facility installation after civil engineering was largely completed at the end of 2008
2010 total ethylene capacity expansion - 1,300,000 tonnes/year
Fushun PC	PetroChina	800,000	350,000 HDPE 450,000 LLDPE 300,000 PP 400,000 BTX 120,000 Butadiene 200,000 SBR	1H of 2011	* expansion project recently started full construction * refinery segment set for trial tests in September-October 2010, chemical part to launch trial runs six months after * Fushun’s cracker capacity would reach 980,000 tonnes/year upon completion
Sichuan PC	PetroChina	800,000	300,000 HDPE 300,000 LLDPE 360,000 MEG 80,000 Oxo-Alcohols, 190,000 Acrylic Acid, 220,000 Acrylates, 180,000 Phenol/Acetone, 130,000 Bisphenol (BPA) 350,000 BTX	End of 2011	* LLDPE unit construction launched in late April 2009 *preliminary design construction drawing should be completed in 2009 * should start civil engineering construction, and complete underground pipe network laying this year
Wuhan PC	Sinopec	800,000	300,000 LLDPE, 300,000 HDPE 400,000 PP 380,000 EG 100,000 Ethylene oxide	End of 2011 at its earliest	* awaits approval of overall planning in late May 2009 * once it passes, a detailed technical design would be required before  civil engineering breaks ground * construction to take 2 to 2.5 years to complete
Daqing PC	PetroChina	600,000	550,000 two LLDPE/HDPE Swing Plants 300,000 PP 200,000 Butanol/Octanol 400,000 BTX	End of 2011 at its earliest	* in planning and equipment purchasing stage * civil engineering works to be launched in 2010  * expansion to take 1.5 or 2 years to complete *operations targeted in end-2011 at the earliest * Daqing’s cracker capacity would reach 1.2m tonnes/year upon completion
2011 total ethylene capacity expansion - 3,000,000 tonnes/year

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By: Becky Zhang
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