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DALIAN, China (Reuters) – On reclaimed land on the island of Changxin near the port of Dalian, workers are putting the finishing touches on a plant that is the future of China’s refining and petrochemical industry.
Here, private chemical company Hengli Group will begin testing its $11 billion oil refinery and petrochemical complex in October.
Plant - Challenge - China - National - Petroleum
The plant is a direct challenge to China National Petroleum Corp’s (CNPC) Dalian Petrochemical Corp facility, the country’s second-largest oil refinery. That 70-year-old plant has been a cash cow for state-owned CNPC but the aging refinery has come under scrutiny after several accidents.
Hengli’s high-tech complex will not only produce the fuels China craves but also the plastics and other chemicals the country will need for the future.
China - Dozen - Mega-complexes - Coast - Years
China plans to add a dozen petrochemical mega-complexes along its east coast over the next five years, in the biggest wave of expansion in its history.
The plants will be backed by state majors Sinopec and Sinochem, private groups Shenghong Petrochemical and Wanhua Chemical, as well as Exxon Mobil and Germany’s BASF.
Policy - Companies - Investment - China - Chemicals
“Under a more liberalized policy, more independent and foreign companies will join the investment that will make China more self-sufficient in chemicals,” said William Chen, chemicals analyst at IHS Markit.
CNPC’s listed arm PetroChina Co , which operates Dalian, has become one of the world’s most valuable oil firms by providing the gasoline and diesel to power China’s expanding private car fleet and the freight trucks underpinning its expanding commerce.
Dalian - Symbol - Competitors - Hengli - Demand
But Dalian may become a symbol of the past as competitors such as Hengli feed the demand of the world’s biggest petrochemical consumer.
China’s demand for diesel will likely peak by 2020 and gasoline by around 2035, according to IHS Markit.
Country - Demand - Ethylene - Building - Block
However, the country’s demand for ethylene, a building block for plastics and polyesters, will rise to 26.8 million tonnes by 2020, from 18.7 million...
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