Shandong Greenlights Two 10-Million-Tonne Integrated Refining and Petrochemical Complexes at Once
Something is shifting in Shandong: two 10-million-tonne-class integrated refining and petrochemical projects have been announced almost simultaneously.
Fuhai: an RMB 75.7 billion aromatics base
The first is the low-carbon restructuring and integrated utilisation base for aromatics feedstock that Fuhai Group is pushing forward at full speed. Total investment is RMB 75.7 billion. Once complete, it will form an industrial cluster of 15 million t/a of refining, 3 million t/a of paraxylene (PX) and 2 million t/a of ethylene, extending downstream into plastics including EVA, POE and PET.
Dongming: an RMB 71.3 billion “super chemical city”
The second is the “super chemical city” being built by Dongming Petrochemical at a cost of RMB 71.3 billion. It is anchored by a 10 million t/a atmospheric and vacuum distillation unit, supported by 1 million t/a of ethylene and 2.4 million t/a of PX, alongside 30 production units covering full-density PE, UPC and EPOE.
So what exactly are EPOE and UPC?
The key point is that neither Fuhai nor Dongming is taking the conventional route. Dongming in particular is deploying two products of its own.
The first is EPOE, billed as a world first. Compared with conventional POE production, EPOE uses ethylene as its single feedstock, bypassing higher α-olefins and breaking through an established technology monopoly.
The second is UPC, short for producing olefins by catalytic pyrolysis of crude oil. It is reported to cut energy consumption by 20% and carbon emissions by 30%, while lifting product yield by more than 15%.
Taken together, Shandong’s move is a decisive step in consolidating resources and moving the region up the value chain.
Will the Coal-Chemical Capacity Wave End the Party for Polyolefin Prices?
Northwest China has roughly 2.7 million tonnes of new polyolefin capacity scheduled to come online in the second half of the year.
All four state-designated coal-chemical bases — Ningdong in Ningxia, Zhundong in Xinjiang, Yulin in Shaanxi and Ordos in Inner Mongolia — are pushing hard on schedule, aiming not just to start up on time but to pull dates forward wherever possible.
Coal chemicals is genuinely a high-margin business at the moment: coal-based PE is returning more than RMB 800 per tonne. In a market like this, you need capacity in hand.
Yulin Chemical Phase II
Yulin Chemical’s Phase II was the first to complete mechanical handover across its 48 units and move into integrated commissioning. From groundbreaking to a skyline of columns and pipe racks took two years and two days — 36 days ahead of plan, and the fastest construction record in China for a project of this scale.
The project includes 300 kt/a of PE, 250 kt/a of EVA and 600 kt/a of PP. One PP line (300 kt/a) runs the former Dow Unipol process for commodity grades; the other (300 kt/a) uses LyondellBasell’s Spherizone process for specialty grades.
More significantly, Yulin Chemical Phase II is the world’s second plant after Baofeng to commission third-generation DMTO technology, with a shorter process route and lower methanol consumption per tonne of product.
The rest of the pipeline
Beyond Yulin Chemical, Baofeng’s Phase IV at Ningdong is also in its final sprint, with 250 kt/a each of PP, PE and EVA.
Rongxin Chemical in Inner Mongolia has reached 82% completion and expects on-spec output from its 400 kt/a PP and PE lines before year-end.
Add the Hami Santanghu units that only started up in May (300 kt/a PP plus 300 kt/a PE), with Sinopec–SABIC Gulei and Huajin–Aramco still to come, and the incremental coal-chemical capacity amounts to around 5% of existing capacity.
With the US–Iran dispute in the background, reading this market has become harder still.
