Dongming Petrochemical Group, a private refiner based in Shandong province, has completed the first round of public disclosure for the environmental impact assessment (EIA) of a large-scale refining-petrochemical integration project at its industrial park in Dongming County, Heze City. The project encompasses 10 million tons/year of atmospheric and vacuum distillation capacity, 1 million tons/year of ethylene, and 2.4 million tons/year of Para-Xylene (PX), with total investment of RMB 71.3 billion (roughly KRW 13.7 trillion). It is counted among the new large-scale projects Shandong province has designated as one of its three key refining-petrochemical projects for 2026. The project remains at the EIA disclosure stage, with contractor selection and actual construction yet to begin.
The project adopts an integration model combining crude refining with downstream petrochemical facilities within a single industrial complex. Centered on atmospheric and vacuum distillation units, it will include ethylene cracking and PX production facilities, with a total of 30 downstream refining and chemical units planned, including high-value-added polyolefin new-material facilities such as EVA (Ethylene Vinyl Acetate), HDPE (High-Density Polyethylene), UHMWPE (Ultra-High Molecular Weight Polyethylene), m-PP (Metallocene Polypropylene), and EPOE-series elastomer materials. Applied process technologies and licensors have not yet been disclosed and are expected to be finalized during the basic engineering phase following the EIA.
Total investment stands at RMB 71.3 billion (approximately KRW 13.7 trillion). Atmospheric and vacuum distillation capacity is 10 million tons/year, ethylene capacity is 1 million tons/year, and PX capacity is 2.4 million tons/year. Downstream refining and chemical facilities, including polyolefin new-material lines, total 30 units.
The project reflects Shandong’s broader policy push to consolidate and upgrade aging independent “teapot” refiners, with a private refiner seeking to move beyond simple refining toward higher-value petrochemical and new-material businesses. It also reflects a broader restructuring trend across China’s refining sector, in which private refiners are pursuing integrated facilities comparable in scale to those of large state-owned players.
The disclosure reaffirms a broader trend among China’s private refiners of expanding downstream petrochemical exposure — ethylene and PX in particular — in response to narrowing refining margins and overcapacity pressure. The heavy weighting toward polyolefin new materials suggests an intent to diversify away from commodity petrochemicals toward higher-value, differentiated materials. However, as this is only a public EIA disclosure, the actual investment execution timeline, contractor selection, and licensor confirmation are likely to take considerable time. Given the scale of the integrated project, expansion of feedstock supply chains and logistics infrastructure will need to proceed in parallel, alongside greater local environmental compliance burdens. The project serves as a useful reference point for gauging the direction of Shandong’s refining-petrochemical industry restructuring. Domestic refining and petrochemical players may also find it useful to track continued Chinese capacity additions in competing product lines such as PX and polyolefin new materials.
Key items to monitor include the timing of formal EIA approval and subsequent contractor selection and EPC (Engineering, Procurement and Construction) contract awards. The choice of process technology licensors for the ethylene and PX units will also serve as an indicator of the project’s competitiveness. The construction start date, its alignment with Shandong’s refining-petrochemical restructuring policy, and the actual startup schedule for the polyolefin new-material units also bear watching.