Sinochem Starts Heavy-Oil-Processing Project in Fujian

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Researched by Industrial Info Resources (Sugar Land, Texas)--Sinochem Corporation (Beijing) began a 5 million-ton-per-annum (TPA) heavy-oil deep-processing project at the end of 2007 in Quanzhou City of Fujian Province. It is located in Quanzhou's Meizhouwan Petrochemical Industrial Park. The project will specialize in catalytic cracking and hydrocracking of heavy oil. Current reports set the running date to 2009 or 2010. A 300,000-ton port will soon be ready to use, and two 150,000-cubic-meter oil tanks will be built exclusively for the refinery's use.

A source closely involved in the project said that the project will mainly process M100 oil from Russia but that offshore oil could also be included. The refinery may also produce some chemical products. Along with a Sinopec refinery in the area, the two will form a chemical industrial zone along China's southeastern coast. Reports state that Sinochem is preparing to invest about $2.4 billion , and that it plans to invest $3.4 billion in a second phase. In Phase II, the capacity will be expanded to 12 million TPA, producing processed oil, arene, polypropylene and other petrochemical products.

Established in 1950, Sinochem has become a major state-owned enterprise, engaging in oil, fertilizer and chemical businesses. It has been ranked among the world's Fortune 500 in the past 14 years. Although small in compared to CNPC, Sinopec and CNOOC, Sinochem's choice to process heavy oil could bring it considerable profits because of the comparatively cheap price, analysts said.

A report from Fujian's provincial development and reform commission states that during the 11th five-year plan (2006-10), Fujian needs about 500,000 tons of ethylene and 300,000 tons of propylene every year to meet demand. The heavy-oil-cracking project will be a vital source of ethylene and propylene.

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