Ten large petrochemical projects around the world are coming on stream
" Take ethylene project as an example, the core equipment is cracking furnace, cracking gas compressor, and at the same time ethylene downstream of a variety of fine chemical products, if for carbon 4, carbon 5 and other deep processing application, an ethylene project can drive more than several times of investment. Therefore, large-scale petrochemical projects are capital-intensive and technology-intensive industries, and the production schedule of the project is generally delayed than expected; From the construction of the project to the final production, it often takes as little as 3-5 years to as much as 10 years. Compared with overseas petrochemical projects, China's supporting facilities are more complete, the investment cost is low, the project construction is fast, and the competitiveness is significantly enhanced. It is expected that the upstream will operate with low inventory, actively increase the proportion of contracts, and reduce the proportion of spot projects. In the future, the marginal impact of demand on petrochemical will increase, and the production cost center of gravity will move down, and the projects with growth and competitiveness will win. Since 2020, the petrochemical industry has entered the peak of plant production, and the market supply has increased. Looking ahead to 2020-2021, there will still be a number of refining and ethylene projects will come on stream, but we believe that the current market price has already reflected the future market expectations, and there is still the possibility of delays in many projects. Because, we believe that the future petrochemical industry as a whole into the era of small profits, but the large refining and chemical equipment with cost advantages, as well as growth, will stand out in the market competition. About the large petrochemical projects to be put into operation in 2020-2021, the main ones are: 1. A 50-50 joint venture project (PIC project) between Petronas and Saudi Aramco. where Pengerang Refining Company Sdn.Bhd. For 15 million tons/year refining, Pengerang Petrochemical Company Sdn. Bhd. For 1.3 million tonnes/year of ethylene. The project was originally scheduled to come on stream in early 2019, but after the closure of one of the project's atmospheric residual hydrodesulfurization (ARDS) units following an explosion in April 2019, Petronas announced that both ARDS units at the refinery needed to be upgraded, with the first ARDS expected to be commissioned by June 2020. According to Saudi Aramco's prospectus, the project is scheduled to run at full capacity in the second half of 2020, and we expect that the project will be delayed with a high probability, and the impact on the market will be less in the first half of 2020. 2. Saudi Aramco Jazan Petrochemical project. The project is 20 million tons/year of oil refining, while supporting 1 million tons/year of PX, and the project investment is about $6 billion. Saudi Aramco announced in the second quarter of 2019 that the utility system at the refinery in Jazan had been put into operation, about a year behind schedule. However, Jazan's location is close to the Yemeni border, and given the safety concerns of the refinery, it is not expected to go into operation in the short term. According to Saudi Aramco's latest prospectus, we expect full capacity in the second half of 2020. 3. Zhejiang petrochemical, refining and chemical integration project. Trial run in May 2019. On October 4, the cracking gas compressor unit of Zhejiang Petrochemical's 1.4 million tons/year ethylene unit successfully ran a test run, marking that the project entered the commissioning stage. Zhejiang Petrochemical is a large-scale refinery and chemical integration project in the complete sense of one-time production. After the hydrogen production link of the project is opened, steam and diesel refining and naphtha refining can be carried out. The follow-up will accelerate the progress of catalytic reforming and catalytic cracking and the load of related devices. We believe that Zhejiang Petrochemical is expected to be fully put into operation in the first half of 2020. 4. Hengli Petrochemical 1.5 million tons/year ethylene. 20 million tons/year refining link in May 2019 to achieve full load through the whole process; Ethylene link, ethylene glycol 1 line achieved medium delivery on November 25, 2019. We expect 1.5 million tons/year of ethylene production in the first half of 2020. 5. Hengyi Petrochemical Brunei 8 million tons/year refining project. On November 3, 2019, the ""PMB Petrochemical Project ""realized the whole process of the plant and fully put into operation, successfully producing gasoline, diesel, aviation kerosene, PX, benzene and other products. The Brunei Petrochemical Project was completed in March this year. The main equipment was completed in July, and all the equipment was transferred to the linkage test stage in the same month; In September, the atmospheric and vacuum equipment produced qualified intermediate products. 6. STAR Petrochemical Project in Turkey. $6.3 billion 10 million tons/year refining project by the State Oil Company of Azerbaijan (SOCAR). The STAR refinery is the largest new refinery built in Europe in the last few decades and the first in Turkey in the last 30 years. All the equipment at the STAR refinery has been put into operation by the end of March 2019. STAR Refinery delivered its first batch of Petkim naphtha to the market in January and its diesel and jet fuel entered the market in February. Downstream BP and Socar Turkey plan to build a new PX/PTA plant, the project plans to invest $1.8 billion, new 840,000 tons/year PX and 1.25 million tons/year PTA, the project construction is scheduled to be completed in 2023. 7. Zhanjiang Zhongke Refining & Chemical Co. The total investment of the project is 38.55 billion yuan, the construction of 10 million tons/year of oil refining and 800,000 tons/year of ethylene, the main producing countries VI gasoline, diesel, aviation kerosene and other oil products and polyethylene, polypropylene, ethylene oxide and other chemical products. The project has a total of 31 sets of main devices. On November 30, 7 sets of production devices such as 200,000 tons/year polypropylene device, 350,000 tons/year polypropylene device, 350,000 tons/year high-density polyethylene device and a number of production auxiliary projects of Zhongke Refining and Chemical realized engineering handover. The project is planned to be fully completed by the end of 2019. We believe that the project is expected to be launched in the second half of 2020, and the main impact on the market will be in 2021. 8. Gulei refining and chemical integration project. The total investment estimate of the project is 27.838 billion yuan, respectively, 800,000 tons/year ethylene steam cracking, 300,000 tons/year cracked gasoline hydrogenation, 250,000 tons/year aromatics extraction, 90,000 tons/year butadiene extraction, 300,000 tons/year ethylene — Ethylene acetate resin (EVA), 27/500,000 tons/year ethylene oxide/ethylene glycol (EO/EG), 600,000 tons/year styrene (EBSM), 350,000 tons/year polypropylene (PP) and other chemical equipment and supporting public auxiliary works. On October 10, 2019, the first large-scale equipment of Gulei Refining and Chemical integration Project — — 800,000 tons/year ethylene plant quench water tower arrived at the port near Gulei, marking the project of large equipment modular construction and lifting work began one after another. We expect the project to influence the market after 2021. 9. Satellite Petrochemical Lianyungang 1.25 million tons/year ethylene project. The project adopts ethane and light hydrocarbon cracking, downstream supporting polyethylene, EO/EG, acrylonitrile and other products. At present, the storage tank area of the project has entered the installation, the dock is under construction, and the main device area has entered the comprehensive civil construction stage. It is expected to enter the trial production stage after completion in the third quarter of 2020. The project needs to be synchronized with the construction of ethane export facilities in the United States, and we expect to achieve full production in the first half of 2021. 10. Lianyungang Shenghong Refining & Chemical Co. The project includes 16 million tons/year of oil refining, 2.8 million tons/year of paraxylene, 1.1 million tons/year of ethylene and downstream derivatives, supporting 300,000 tons of crude oil terminal and public works island. On November 18, 2019, the 1 million tons of ethylene glycol project broke ground, and the Shenghong Refining and Chemical Integration Project was listed as a major project in Jiangsu Province, which started construction on December 14, 2018, and is currently in the early stage of construction. It is expected to be completed and put into operation in 2021. We expect the impact on the market to be in 2022 or later.
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Large petrochemical projects have a long construction period, especially overseas petrochemical projects, and the overall schedule is more likely to be delayed. The driving effect of the petrochemical industry on the national economy is ineffable. A petrochemical project involves project design, construction, equipment manufacturing, catalyst and process route selection, etc. At the same time, petrochemical projects are also crucial to the extension of the downstream industrial chain.
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