China Seeks Foreign Suppliers for $3.89 Billion Annual Petrochemical Equipment Market

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Researched by Industrial Info Resources (Sugar Land, Texas). China will invest $3.89 billion every year in petrochemical equipment in the coming five years, and about 25% of the investment will go to foreign companies, according to a plan issued recently by China Reform and Development Commission, the top development plan maker.

According to the plan, during the eleventh "Five Year Plan Period," China will build a large mount of ethylene projects to form seven ethylene complexes and twenty oil refineries. Of the total investment for the equipment to be bought, 75% will go to China's domestic equipment suppliers, leaving one fourth of the market to foreign suppliers.

China's three oil giants, PetroChina, Sinopec and China Offshore Oil have started or will start a series of projects in enlarging refineries, ethylene, PTA and methyl alcohol; the equipment to be bought for the projects will cost $3.89 billion, without taking in consideration other oil and petrochemical companies and projects.

Currently, PetroChina is busy with a one-million-ton ethylene project in Fushun (in China's northwestern Liaoning Province), an ethylene project with a yearly capacity of 800,000 tons in western Sichuan Province and an ethylene project with a yearly capacity of 600,000 tons in Daqing (in China's northwestern Heilongjiang Province), in which equipment from home and abroad are in urgent need.

PetroChina has just disclosed China's biggest oil reserve in 40 years, and China's excessive thirst for oil compels it to drill oil from there and turn the oil quickly into industrial materials or final products. The urgent need will be reflected in increased equipment purchasing.

However, China is still behind in terms of process equipment development, software and technology. Lacking intellectual property rights and technology and low reliability in homemade equipment leave China with no choice but to buy equipment from abroad.

China puts emphasis in buying the following equipment from domestic suppliers: 1 million-ton level ethylene and complete set of equipment for further processing; 600,000 ton level to 1 million-ton level PTA complete set of equipment, and catalytic hydrocracking and hydrogen refining equipment used in ten-million-ton level refineries.

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