China to beef up ethylene capacity by 82% in three years

Ethylene capacity would likely grow 82% to 17.84m tonnes/year over the next three years with the help of the fiscal stimulus package dedicated to the petrochemical sector, industry sources said on Tuesday.

The additional capacity will come from five new crackers and six cracker expansions projects that would be completed from this year to 2011, most of which were being carried out by subsidiaries of state-owned refiners Sinopec and PetroChina.
(Please see the table below on cracker project updates compiled by CBI based on interviews with respective companies)

About 45% or 3.56m/ tonnes of the expected capacity increase would come in this year, starting off with the new 800,000 tonne/year cracker of Sinopec unit Fujian Refining & Petrochemical (FREP) that will be launched in July.

Also in July, Shanghai Secco Petrochemical’s cracker would have added 300,000 tonnes/year in new capacity to 1.2m tonne/year. Tianjin Petrochemical, another subsidiary of Sinopec, would have a major ethylene capacity increase of 1m tonnes/year in November and December to 1.2m tonnes/year.

PetroChina unit Dushanzi Petrochemical was also expected to boost its ethylene capacity by the same magnitude to 1.22m tonne/year at around the same time.
By the end of 2009, Huajin Chemical Industrial Group would have also raised its cracker capacity by 460,000 tonne/year to 620,000 tonnes/year.

In 2010, ethylene capacity in China would be raised further by 1.3m tonnes/year with the launch of Sinopec subsidiary Zhenhai Oil Refining and Chemical (ZRCC)’s 1m tonne/year cracker in April to May and Baotou Shenhua Coal Chemical’s new 300,000 tonnes/year ethylene plant coming on stream in the second half.

Another 3m tonnes/year in ethylene capacity will come on stream in 2011, with the expected start-ups of two new crackers and two other capacity expansion.
PetroChina unit Fushun Petrochemical would also boost its cracker capacity by 800,000 tonnes/year in the first half of 2011, while Sichuan Petrochemical would have a new 800,000 tonnes/year cracker by the end of that year.

Sinopec’s Wuhan Petrochemical will further augment China’s ethylene capacity by 800,000 tonnes/year while PetroChina unit Daqing Petrochemical will doubled its ethylene capacity to 1.2m tonnes/year by the end of 2011.

The last two companies have some reservations on the scheduled start-ups, citing slow progress on the projects, industry sources said.
“We expect the completion of the project would be in 2012 based on current status; however, earlier launch would also be possible if everything goes smoothly under government’s support,” said a source from Wuhan Petrochemical.
The Chinese government had unveiled last week the specific targets on what its petrochemical stimulus plan aims to achieve three years down the road.

It hopes the government funds would ensure stable growth in the industry by boosting the country’s crude oil processing capacity to 405m tonnes and increase its ethylene output o 15.5m tonnes by 2011.