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Shenghong starts work on refinery & cracker in Lianyungang

China's private-sector Shenghong Petrochemical has begun construction of a major refinery in the eastern Lianyungang petrochemical zone. The company had hoped to begin work at the end of 2018. It secured approval from China's top planning body, the NDRC, in September 2018, but it took longer to secure approval from the ministry of ecology and environment. Shenghong's first environmental impact assessment failed to pass muster, and it then revised the project specification.

Shenghong started work on the plant — comprising a single 320,000 bpd crude unit and a 76,000 b/d naphtha reformer — in mid-2019. The company aims to finish construction at the end of this year, to complete installation of various units next year ,and for the plant come on stream in 2021.

Shenghong is designed to run sour crude from the Mideast Gulf. It will build a terminal capable of unloading 2MM bbl very large crude carriers at Lianyungang, in Jiangsu province. The refinery will prioritise supply of petrochemical products, and will yield only limited transport fuels — gasoline, diesel and jet will account for just 35pc, rather than over 60pc of yields at conventional refineries operated by state-controlled PetroChina and Sinopec. Shenghong will produce 56,000 b/d of gasoline, 41,000 b/d of diesel and 32,000 b/d of jet at full capacity, adding to China's oversupply of road fuel. Shenghong Petrochemical hopes to persuade the government to grant it an export quota that would allow it to market the refinery's fuel overseas.

Only state-owned firms are presently allowed to export refined products from China, but mounting domestic fuel surpluses are encouraging Beijing to review this. The government is considered more likely to grant private firms export licences if they are located in seven designated refining and petrochemical 'bases', rather than areas such as Shandong, as part of an initiative to draw oil sector investments away from built-up, urban areas.

Other major new greenfield refineries Rongsheng ZPC and Hengli Changxing, are located in petrochemical base areas, but neither has secured export allowances. Hengli ramped up to 85pc utilisation at its 400,000 b/d refinery in May and is now running at full capacity. ZPC brought one of its two 200,000 b/d crude units on stream in May.

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From the April 2018 issue of Hydrocarbon Processing


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