Good News: Key Progress Achieved in Several Million-Ton Ethylene Projects
Since the beginning of the year, several highly anticipated million-ton ethylene projects have seen new progress. Core equipment commissioned、Major Project Launch、Breakthrough at key nodesDuring the "14th Five-Year Plan" period, large-scale integrated refining and chemical projects saw concentrated investment and commissioning, leading to a surge in refining and ethylene production capacity, which reshaped the market landscape. Entering the "15th Five-Year Plan" period, although the expansion trend has cooled, the capacity of previously planned projects is being progressively released, which will further exacerbate the mismatch between supply and demand. Under the pressure to "combat involution," how can we deeply tap potential and enhance competitiveness?
January 14th,China National Petroleum Corporation (CNPC) Dalian Petrochemical Branch (Xizhong Island) Refinery and Chemical Integration Project Marine Use Public Notice Released. This project is the first large-scale relocation and reconstruction case for a domestic refinery and chemical enterprise, with a total investment of 68.5 billion yuan and planned construction to commence in 2026.
The project will construct a new 10 million tons/year oil refining facility, a 1.2 million tons/year ethylene plant, and supporting downstream chemical units. The downstream product portfolio covers high-end polyolefins, including a 400,000 tons/year PP unit, two 450,000 tons/year FDPE units, a 300,000 tons/year LDPE unit, a 200,000 tons/year POE unit, and a 300,000 tons/year CHPPO unit.
January 13th The air separation unit, the first unit to undergo trial operation in the 83.7 billion yuan Sino-Saudi Petrochemical Complex, successfully started up on its first attempt. This marks another milestone following the mechanical completion of all 32 main production units on December 25, 2025.
The project's refining section includes:Construction of a new 15 million tons/year atmospheric and vacuum distillation unit, light hydrocarbon recovery unit, coal diesel hydrotreating unit, diesel hydrocracking unit, wax oil hydrocracking unit, residue hydrotreating unit, residue catalytic cracking unit, high propylene catalytic cracking unit, gasoline desulfurization unit, aromatics complex (including paraxylene) unit, gas purification unit, gas fractionation unit, C2Recovery unit, PSA unit, coal-to-hydrogen unit, ammonia synthesis unit, methanol unit, sour water stripper unit, solvent regeneration unit, sulfur recovery unit, totaling 20 process units.
Chemical Section includes:Construction of a new 1.5 million tons/year steam cracker (producing 1.63 million tons/year of ethylene, including ethylene recovered from other units), a hexene-1 unit, an ethylene glycol unit, an ethylbenzene/styrene unit, a high-density polyethylene (HDPE) unit, a full-density polyethylene (FDPE) unit, three polypropylene (PP) units, an acrylonitrile unit, an MMA unit, an ABS unit, a butadiene extraction unit, and a C...4Integrated units and pyrolysis gasoline hydrogenation integrated units, totaling 15 sets of process units.
January 11The EO reactor for the Gulei Petrochemical Base was successfully lifted and installed at the site of the Sino-Saudi Gulei Ethylene Project, marking the successful completion of the lifting of all large-scale equipment for the project. With a total investment of 44.8 billion yuan, the Sino-Saudi Gulei Ethylene Project is jointly constructed by Fujian Zhongsha, established in March 2022, Fujian Fuha Gulei Petrochemical Co., Ltd. (controlled by Fujian Energy and Petrochemical Group), and Saudi Industrial Investment Company (a wholly-owned subsidiary of SABIC), with equity ratios of 49:51, respectively. It is a key project for Sino-Saudi cooperation in the energy sector.
Project includes: Ethylene and Downstream – Ethylene production capacity is 1.5 million tons/year. Downstream ethylene plans include 100,000 tons/year of ethylene oxide/ethylene glycol, 400,000 tons/year of HDPE, 600,000 tons/year of mLLDPE/HDPE, and 50,000 tons/year of hexene-1. Propylene and Downstream – Downstream propylene plans include 400,000 tons/year of polypropylene (impact/random) and 550,000 tons/year of polypropylene (homopolymer/random). Additionally, some downstream propylene plans include 250,000/150,000 tons/year of phenol/acetone, 270,000 tons/year of bisphenol A, and 290,000 tons/year of polycarbonate. Furthermore, supporting facilities include a 910,000 tons/year cracked gasoline hydrogenation unit (including styrene extraction), a 220,000 tons/year butadiene extraction unit, a 56,000 tons/year butene-1 unit, and a 570,000 tons/year aromatics extraction unit.
January 8thThe Tarim Polypropylene Project Department of the Fourth Branch successfully completed the initial solo trial run of the first high-voltage motor for Dushanzi Petrochemical Company’s 1.2 million tons/year Phase II Ethylene Project Polypropylene Unit. All technical parameters precisely met design specifications, marking that the unit's core power system is now fundamentally ready for commissioning.
Project Team Composition Ethylene plant, FDPE plant, LDPE plant (with EVA production capability), PP plant, butadiene extraction plant, MTBE/butene-1 plant, polybutadiene rubber plant, pyrolysis gasoline plant, aromatics extraction plant, and supporting utilities, auxiliary production facilities, and storage and transportation facilities, etc. Main products include HDPE, LLDPE, LDPE, EVA, PP, polybutadiene rubber, MTBE, pyrolysis C5Benzene, toluene, mixed xylene, and pyrolysis fuel oil are produced, with polyethylene wax, butadiene, and C as byproducts. 9+
Evening of January 7th On [Date], BASF announced the successful start-up of its ethylene cracker, the core of its Verbund site in Zhanjiang. The cracker will supply ethylene and propylene to multiple plants within the site and has an ethylene production capacity of 1 million tons per year. The project represents a total investment of €10 billion (approximately RMB 78 billion), making it BASF’s largest single investment project globally.
The project's core units consist of a steam cracking unit with an annual capacity of 1 million tonnes of ethylene, as well as several downstream units including a 660,000/830,000 tpy ethylene oxide/ethylene glycol (EO/EG) unit, a 215,000 tpy non-ionic surfactant unit, and a 500,000 tpy polyethylene unit, along with supporting utilities and auxiliary facilities.
January 4th Yueyang Area 1 Million Tons/Year Ethylene Refining and Chemical Integration Project, 1 Million Tons/Year Ethylene and Six Other Units, Seven Process Technology Licensing High-Tech Service Section 1 Transaction Result. China Petrochemical Technology Development Co., Ltd. is determined as the successful bidder. The Yueyang Ethylene Project has a total investment of 35.68 billion yuan and is the largest single industrial project in Hunan to date, including 1 million tons/year of ethylene and refinery supporting renovation.
The main construction contents of the ethylene project include:The project involves the construction of a new 1 million tons/year ethylene plant and 14 downstream chemical units. Among them, 10 main chemical units will be built in the Changling New Area, including a 1 million tons/year ethylene plant, a 500,000 tons/year pyrolysis gasoline hydrogenation unit, a 300,000 tons/year aromatics extraction unit, a 300,000 tons/year aromatics-to-benzene unit, a 150,000 tons/year butadiene extraction unit, a 20,000 tons/year styrene extraction unit, a 300,000 tons/year EVA unit, a 400,000 tons/year high-density polyethylene (HDPE) unit, a 400,000 tons/year linear low-density polyethylene (LLDPE) unit, and a 100,000/40,000 tons/year MTBE/Butene-1 unit.
As the "15th Five-Year Plan" begins, multiple refining and chemical integration projects are scheduled to commence operations. By the end of 2030, the characteristics of domestic refining capacity reduction and replacement will become more pronounced. New refining capacity will increase by 30 to 40 million tons, all of which will consist of large-scale integrated projects. Under the "oil-to-chemicals" trend, there are still planned capacities of 26 million tons/year for ethylene and 10 million tons/year for PX (paraxylene).
In addition to the aforementioned projects, large-scale integrated refining and petrochemical projects expected to be commissioned during the "15th Five-Year Plan" period also include:
The Dongming Petrochemical 15 million tons/year refining and chemical integration project with a total investment of 73.8 billion yuan
Main construction includes a 15 million tons/year crude distillation unit, a 1.6 million tons/year ethylene unit, a 2.2 million tons/year paraxylene unit, and 36 supporting downstream units. The project primarily focuses on the production of high-end petrochemical products while also producing clean fuels. It includes the construction of a steam cracking ethylene production unit to provide a large-scale, competitive feedstock for downstream chemical new materials and specialty chemicals production. Chemical units such as EVA, PO/SM, ABS, FDPE, UHMWPE, m-PP, and EPOE will be constructed to produce high value-added chemical products.
● CNOOC and Shell Petrochemicals Company (CSPC) Huizhou Phase III Ethylene Project, with a total investment of 48 billion yuan
Construction of a 1.6 million tons/year ethylene cracking plant and 16 downstream chemical units, as well as utilities and supporting facilities. Upon completion, CNOOC and Shell Petrochemicals Company Limited's (CSPCL) ethylene production capacity will reach 3.8 million tons/year, maintaining its position as the largest single-site ethylene plant and the largest ethylene production base in China.
The Qilu Petrochemical "Lu You Lu Lian" transformation and upgrading project, with a total investment of 24.4 billion yuan.
Construction of a 10 million tons/year refinery and a 1 million tons/year ethylene plant, to be completed in 2027.
Yulong Petrochemical Phase I and downstream supporting facilities, with an investment of 116.8 billion yuan
Construction of a 20 million tons/year refinery, 3 million tons/year ethylene plant, and 3 million tons/year mixed xylenes plant, with full production commencing in 2029.
The refining and chemical industry has always held an extremely important position and played a crucial role in China's national economy and social development. However, under the guidance of the "dual carbon" goals, China needs to accelerate energy transition, which bestows new status and missions upon the refining and chemical industry. According to the "2026 China Energy and Chemical Industry Development Report," as of the end of 2024, China's primary refining processing capacity will reach 950 million tons/year, with an average annual net increase in refining capacity exceeding 10 million tons/year during the "14th Five-Year Plan" period. This has driven the continuous expansion of Chinese refining and chemical enterprises, with the number of refining enterprises with a capacity of over 10 million tons increasing to 39.
Meanwhile, with refined oil demand expected to peak, "reducing fuel and increasing chemicals" has become the primary direction for refinery transformation in recent years. New integrated refining and chemical projects are extending the industrial chain toward chemicals, leading to a continuous rise in olefin and aromatic production capacity. During the "14th Five-Year Plan" period, ethylene capacity is projected to increase from 34.59 million tons/year to 64.27 million tons/year, while PX capacity is expanding at a rate of 10%.
In the current cycle, the chemical industry prosperity index is declining steadily due to the explosive growth in capacity, and the pricing logic is changing. The pattern of "high cost, weak demand, and strong supply" has severely hindered the cost transmission mechanism of the industrial chain, and chemical products have moved away from "cost-based pricing" and are gradually becoming a "supply and demand-based pricing" model. It is foreseeable that during the capacity release period, the refining and chemical industry will continue to be in a weak prosperity cycle. In the red ocean of competition, the intensified "involution" is not only reflected in the "price involution" but also in the "industrial chain involution." It is recommended to improve competitiveness from the following three aspects:
First, promote industrial optimization and upgrading.Orderly advance the adjustment of refining products, continuously optimize process flows and unit structures, and systematically promote the "oil-to-chemical" and "oil-to-specialty chemical" transformation of the refining industry. Coordinate crude oil product supply and transformation development, and enhance the resilience of refinery product supply.
Secondly, we will promote the extension of industrial chains. Strengthening and extending supply chains 。Extend upstream to integrate crude oil procurement, storage, and transportation, and downstream to expand olefin and aromatic deep processing to polyolefins, polyesters, fine chemicals, and new chemical materials, thereby lengthening the value chain and increasing product added value. Fill gaps in the utilization of C3, C4, C5/C9 by-products and improve ancillary facilities for the industrial chain (e.g., catalysts, additives, packaging). Through technological innovation (e.g., efficient heavy oil conversion, refining-hydrogen energy synergy), economies of scale, and clustered development, strengthen the competitiveness of core units, and enhance the overall resilience against fluctuations and the green and low-carbon level of the industrial chain.
Third, promote green and low-carbon industrial development.Driven by technological innovation, with whole-process energy saving and carbon reduction as the key, and circular economy as the path, we will systematically exert efforts in four dimensions: raw materials, production, products, and industrial parks, to promote the transformation of the industry from "high-carbon refining" to "green intelligent manufacturing." We will increase investment in green and low-carbon technology R&D, establish industry-university-research cooperation mechanisms between enterprises, universities, and research institutes, and focus on breakthroughs in core technologies such as CCUS, green hydrogen production, and bio-based chemicals. We will also encourage technology introduction, digestion and absorption to improve the localization level of technology.
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