MOSCOW (MRC) -- China's privately-owned Shenghong Petrochemical plans to start test runs at its 320,000-bpd crude unit in August or September, a company official told Reuters.
The new plant, based in the eastern port city of Lianyungang, will be the only greenfield oil refinery coming on stream in China this year, with its capacity equal to nearly 3% of the country's crude oil imports. Commercial operations at the plant are likely to begin in the first quarter of next year, upon completion of its downstream petrochemical facilities.
The refiner is in talks with suppliers to secure about 15 million barrels of crude oil, focusing on low-sulphur, low-acid grades, to be used for its trial runs through the end of 2021, the official said late on Tuesday. "Company will focus on ensuring safe and stable trial operations," said the official, who declined to be named.
The oil shipments will need to come in smaller vessels from nearby terminals as its own facility to anchor very large crude carriers will only be ready for use towards end of the year, the official said. Shenghong has been recruiting for its Singapore-based trading team for a while and currently has about 10 people on board, covering crude oil, products and shipping, according to the official and industry sources.
The team is expected to expand to nearly 30 people within two years, the official added. Shenghong is building an integrated refining and petrochemical complex with a total investment of 66.7 billion yuan (USD10.43 billion) that will include the refinery, a 2.8-MMtpy aromatics unit and a 1.1 MMtpy ethylene plant, according to the company website. It will also contain 3.83 million cubic meters of oil and chemical storage.
As per MRC, Shenghong Petrochemical plans to launch a complex in Lianyungang (in Jiangsu Province, China) at the end of 2021 at the end of 21 years. The complex includes an oil refinery with a capacity of 320 thousand barrels per day, a paraxylene plant of 2.8 million tons per year and an ethylene plant of 1.1 million tons per year, as well as various other enterprises. Shenghong will first commission the refinery and plans to bring it online in August. The company is currently accelerating construction, which was interrupted by the pandemic.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.