The hottest oil refining industry has reached a co

2022-08-11
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Since the reform and opening-up, China's oil refining industry has made great progress, and its oil refining capacity has leapt to the second place in the world. However, the contradiction of overcapacity has become increasingly prominent and intensified, forcing oil refining enterprises to transform from the original fuel type to refining and chemical integration, from mainly producing refined oil to lengthening the industrial chain, and to develop in the direction of "simultaneous development of oil and chemical industry and the transformation of oil head to tail". However, industry insiders warned that the trend of refining and chemical integration is bound to transmit the pressure of oil refining overcapacity to the chemical industry, and we should be alert to the signs of overcapacity in the chemical industry sector

the excess capacity of crude oil processing will exceed 100 million tons per year

at the end of July, Shandong, a major refining Province, held an executive meeting of the provincial government, which specially studied the capacity integration and transfer of local refining enterprises

if the friction coefficient is too low

in fact, as early as last October, Shandong issued the implementation plan on accelerating the high-quality development of the seven high energy consuming industries, drawing a road map for the reduction, integration, transformation and upgrading of the local refining industry: strive to integrate and transfer the refining capacity of local refining enterprises located in urban densely populated areas and with a refining capacity of 3million tons or less by 2022; By 2025, the refining capacity of local refining enterprises of 5million tons and below will be integrated and transferred step by step, and the crude oil processing capacity of the local refining industry in the province will be reduced from the current 130million tons/year to about 90million tons/year

Shandong's integrated reduction of local refining capacity certainly has its own reasons, but also is inseparable from the overall overcapacity of the national refining industry. Relevant data show that Shandong's primary crude oil processing capacity reaches 210million tons/year, accounting for about 1/4 of the country's total production capacity. The scale of oil refining capacity is second only to Houston in the United States and the coast of Tokyo Bay in Japan. Among them, the local refining capacity of Shandong Province is 130 million tons/year, accounting for 70% of the total refining capacity of the country without affecting the accuracy. According to the data of jinlianchuang, from 2017 to 2018, the average operating rate of Shandong local refinery was only maintained at a level of more than 60%. Since this year, under the dual pressure of high inventory of refined oil depots and widening losses, the operating rate has shown a downward trend, with a capacity of 2.5% The specially equipped 1-point grounding experimental grounding wire group is far from being effectively released

if we zoom in to the whole country, contrary to Shandong's initiative to reduce local refining capacity, the national refining capacity will increase unabated in the future. According to the 2018 domestic and international oil and gas industry development report released by the China Institute of Petroleum Economics and technology, China's oil refining capacity structural surplus is becoming heavier. In 2018, the expansion momentum of new refining capacity across the country was strong, and the elimination speed and range of backward production capacity were lower than expected. The primary processing capacity of crude oil increased by 22.25 million tons, and the total refining capacity increased to 831 million tons/year. The crude oil processing volume in that year was only 606 million tons, that is, the capacity utilization rate was 72.9%. Judging from the comprehensive scale, product quality, energy consumption and integration level, the domestic refining capacity was at least 90million tons/year surplus last year

Fu Xiangsheng, vice president of the China Petroleum and Chemical Industry Federation, said in Yantai, Shandong Province recently that there is a reasonable range of overcapacity in developed economies. If the unit operating rate or capacity utilization rate is used as a symbol, it is better to be 80% to 85%. At the end of last year, the average capacity utilization rate of China's oil refining units was about 73%, which is 10 points behind the world average level, and about 18 points behind the operating rate of the United States in the past two years

experts believe that under the stimulation of a series of reform dividends such as the liberalization of crude oil import and the decentralization of approval authority, the domestic refining scale will still grow rapidly, and the excess pressure is difficult to ease

in May this year, two 20million ton/year "Big Mac" projects of Dalian Hengli petrochemical and Zhejiang Petrochemical phase I were put into operation successively. Independent refineries became the main force of new refining capacity, and the overcapacity situation became more serious. According to the prediction of China Academy of Petroleum Economics and technology, in 2019, as local large-scale private refining and chemical projects are put into operation and some backward production capacity continues to withdraw, the national primary crude oil processing capacity will increase by 32million tons, and the excess capacity will reach 120million tons/year

although China has ranked second in the world in terms of oil refining capacity, the problems of small average scale and low integration level of refineries are very prominent. Zhao Rui, a senior economist at the Institute of economics and technology of China Petrochemical Corporation, said that the average size of China's refineries in 2018 was 87 thousand barrels per day, only half of the world average. Structural adjustment will become one of the main development directions of China's oil refining industry

it is understood that refined oil, as the main product of crude oil processing, has also faced heavy excess pressure in recent years. According to the "2019 China energy and chemical industry development report" released by the economic and Technological Research Institute of China Petrochemical Corporation, it is estimated that the domestic product oil output in 2019 will be 371million tons. The maximum force, tensile strength, peel strength, flexural strength, compressive strength, elastic modulus, fracture elongation, yield strength and other parameters can be calculated, while the apparent consumption is only 323 million tons

contrary to the surplus of refined oil, there is a large gap in many basic chemical raw materials in China. Refining and chemical integration, less oil and more, has become the consensus of the current transformation of the oil refining industry

"refining and chemical integration" finds a way out for resolving overcapacity

cicadas chirp in hot summer. In Lubei area around Bohai Bay, a number of refining and chemical integration projects are stepping up construction or preliminary demonstration. According to the person in charge of a local refining enterprise, their light hydrocarbon comprehensive utilization project will be completed and put into operation next year, further stretching the industrial chain and truly "eating and squeezing" crude oil. At present, in the product structure of this enterprise, chemical products account for a large proportion more than gasoline and diesel

from here to the East, in Longkou, Yantai, the preliminary work of Yulong Island refining and chemical integration project with a total planned capacity of 40million tons/year is being fully promoted. This high-end refining and chemical project carries the important vision of the integration and improvement of Shandong local refining

it is understood that Shandong is making every effort to build an integrated industrial model of "oil head and tail", so as to realize the balanced development of oil refining and downstream high-end petrochemical products production, and change from "one oil dominating" to "both oil and chemical". Shandong proposed to build large-scale refining and chemical integration projects and create high-end petrochemical industry and characteristic industrial clusters in the high-end petrochemical industry base in northern Shandong and the chemical industry parks with high concentration and large production capacity announced by the provincial government in accordance with the principle of "optimization and reorganization, reduction and integration, increasing the size and suppressing the size, and refining and chemical integration"

the transformation direction of Shandong local refining industry represents the development trend of domestic refining industry. Experts said that China's petrochemical industry is facing a structural contradiction between excess refining capacity and insufficient supply of chemical products, especially high-end petrochemical products. At present, the demand for refined oil has slowed down, but basic organic chemical raw materials such as aromatics and olefins are still in short supply. Oil refining enterprises urgently need to transform and upgrade from "fuel type" to "refining and chemical integration"

Lishousheng, President of China Petroleum and Chemical Industry Federation, said that in 2018, the total trade volume of China's petrochemical industry was 743.27 billion US dollars, but the trade deficit was as high as 283.3 billion US dollars, an increase of 42.5% year-on-year. The main reason for the trade deficit was the import of new chemical materials and special chemicals

this reveals that the domestic supply capacity is far from meeting the market demand, but at the same time, it points out the direction for the transformation of oil refining enterprises. There is still huge gold mining space for chemical raw materials and downstream derivatives. At present, the newly-built large refining and chemical integrated enterprises continue to compress the yield of refined oil and significantly increase the proportion of chemical raw materials

on Changxing Island, Dalian, Liaoning Province, the 20million ton/year refining and chemical integration project of Hengli was completed and put into operation here in May. By using new technologies such as diesel hydrogenation, mixed dehydrogenation, and isomerization separation, low value-added materials are transformed into high value-added chemical products. With 20million tons of raw oil, more than 14 million tons of chemicals can be produced, with a chemical product rate of 70%

it is reported that the Hengli refining and chemical integration project has a 4.5 million ton/year aromatics combined plant, which is also rare in the world. It can increase the total output of aromatics, an important domestic chemical raw material, by 30%, make up for the shortage of domestic aromatics supply, and reverse the situation of relying heavily on imports

according to Zhao Rui's analysis, there will be dozens of large-scale refining and chemical integration projects in China in, with more than 30million tons of new ethylene and PX capacity respectively. At that time, the Yangtze River Delta, Pearl River Delta and Liaodong Bay will move towards a world-class refining and chemical base, accounting for 60% - 80% of the national petrochemical production capacity

not only domestic private petrochemical enterprises have accelerated their layout, international giants have also rushed to the Chinese market. For example, ExxonMobil announced the construction of a $10billion wholly-owned petrochemical project in Huizhou, Guangdong

with the further liberalization of the domestic refining and chemical market, large foreign-funded enterprises such as shell, ExxonMobil, BASF and Saudi Aramco have successively arranged large-scale refining and chemical integration projects in China, and the diversified competition among state-owned, local refining, foreign-funded and other business entities is becoming increasingly fierce

be alert to the excess of chemical industry due to the transmission of oil refining pressure

"we originally planned to launch styrene projects, but we found that styrene was being produced in many parts of the country, so we gave up, and now we are still studying and discussing what chemical products to launch." When the person in charge of a local refining enterprise in Shandong talked about their "simultaneous development of oil and chemical industry" strategy, his words were somewhat confused, which to some extent reflected the hidden worry of overcapacity in the current chemical industry sector

industry insiders said that with refining and chemical integration becoming the unanimous choice for industry transformation, the increasing refining capacity is bound to transmit excess pressure to the chemical sector

Zhao Rui said that with the diversified development of competitors, the whole industrial chain has been expanded by leaps and bounds. In 2018, the new capacity of olefins, polyolefins and other products reached a new high, and the whole industrial chain will usher in a larger scale of capacity expansion in 2019. The vast majority of new capacity in 2019 exceeded that in 2018

he judged that in the next decade, China's chemical industry capacity expansion will reach an unprecedented scale, and the whole industrial chain will face excess pressure. Among them, the capacity of basic chemicals (triethylene triphenyl and methanol) will grow rapidly with an average annual scale of more than 17million tons/year, but the downstream demand growth is far less than supply, resulting in the average self-sufficiency rate of domestic bulk petrochemical products rapidly exceeding 90%, and nearly 70% of chemical products will face excess pressure

at the economic situation analysis meeting of the National Petroleum and chemical industry held a few days ago, Fu Xiangsheng introduced that since the 13th five year plan, many sets of large-scale refining and chemical integrated units have been planned to be built. This year, two 20million ton/year units have been put into operation, and there are no less than five 16million ton/year or 20million ton/year refining and chemical units that have been started and are to be started. The capacity of olefins and aromatics has also increased rapidly. PX will increase its capacity by 8.96 million tons per year this year, and the total capacity will reach 22.75 million tons per year; At present, there are 11 projects under construction and 6 proposed projects, with a total capacity of 31.4 million tons/year. It is expected that the total capacity of PX will reach 44 million tons/year in 2025, and the production and sales will be saturated

Fu Xiangsheng believes that the realistic choice of petrochemical enterprises is to promote structural adjustment and accelerate transformation and upgrading. On the basis of refining and chemical integration, the new petrochemical units must highlight the market demand orientation, the industrial chain design should be less oil and more, the output of refined oil should be as low as possible, and the diesel gasoline ratio. Chemical products should also be based on local demand, aim at the domestic market, face international supply and demand, and do a good job in the high-end and differentiation of product structure, Strengthen the core competitiveness of enterprises

in addition, China's refining and chemical industry has insufficient innovation capacity, especially restricted by high-end technology, which brings challenges to the development of refining and chemical integration. With the improvement of global refining capacity and the intensification of market competition, the complexity of refinery units is getting higher and higher, including catalytic cracking and hydrocracking

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