802.9 Billion Yuan Investment Awaits Approval: Shaanxi Yanchang Petroleum's 10-Million-Ton Refining and Chemical Project Submitted to State Council

The Yan'an 10 million tons/year refining and chemical integration transformation and upgrading project of Yanchang Petroleum, with a total investment of 80.29 billion yuan, has completed all preliminary preparatory work and has been formally submitted to the State Council for approval. This marks a decisive step towards the implementation of the landmark project of Shaanxi Province's "14th Five-Year Plan," which will inject impetus into the structural transformation of the Northwest petrochemical industry.

Centering on the core strategy of "reducing fuel and increasing chemicals," the project addresses the critical pain points of "refined oil surplus and chemical feedstock shortage" in the petrochemical industry, driving the industrial transition from "fuel-oriented" to "material-oriented."

The project will construct two core units: a 10 million tons/year atmospheric and vacuum distillation unit and a 1.2 million tons/year ethylene unit. Concurrently, it will shut down a total of 12.4 million tons/year of crude oil processing capacity in Yan'an, Yulin, and other locations, achieving intensive capacity upgrades.

Its core highlight is optimizing the existing refining oil-to-chemical ratio from approximately 9:1 to 5:5, reducing refined oil output, and increasing the production of basic chemical raw materials such as ethylene to meet the demand of the high-end chemical materials market.

In line with "dual carbon" goals, the project features a supporting CCUS demonstration facility with an annual CO2 capture capacity exceeding 500,000 tons. The new ethylene unit adopts advanced technologies, capable of reducing unit energy consumption by more than 15%.

The project uses self-produced crude oil from PetroChina as raw material to extend production to high-end products such as EVA and electronic-grade hydrofluoric acid, meeting the demands of new energy and electronic information industries, and providing supply chain support for leading enterprises like BYD.

The project completed its environmental impact assessment (EIA) public announcement in 2024, passed the review by the National Development and Reform Commission (NDRC) and multiple ministries in May 2025, and is currently in the final approval stage after being submitted to the State Council. As of January 2026, official documents indicate that the project is still advancing preliminary work, with a focus on coordinating raw material supply and policy support.

The project has obtained approvals for total pollutant reduction at provincial and municipal levels, as well as land use approval from the Ministry of Natural Resources, complying with the national "capacity replacement" policy. Government and enterprise have collaborated to advance infrastructure construction; the 1-million-cubic-meter crude oil reserve has achieved intermediate handover, ensuring the supply of raw materials.

Upon completion, the project is expected to generate an annual revenue of 65.6 billion yuan and tax revenue of 14.5 billion yuan. It will foster a 100-billion-level petrochemical cluster, drive employment in the Yan'an revolutionary base area, and contribute to the ecological protection of the Yellow River basin and the Great Western Development.

This project, a core pillar of Yanchang Petroleum's (a 120-year-old company) transformation towards a "chemical-oriented" and "materials-oriented" business, aligns with its green and digital transformation strategy and will solidify its leading position as a petrochemical enterprise in Western China.