CNPC-affiliated Dushanzi Petrochemical’s Phase 2 ethylene unit under construction at the Shangku Petrochemical Industrial Park in Tarim (Korla), Xinjiang, is scheduled to reach full commercial startup on September 30, 2026, it is reported. The unit reportedly completed mechanical completion in May and has undergone commissioning since.
The project is a capacity expansion for Dushanzi Petrochemical’s ethylene production, notable for incorporating a low-carbon demonstration process alongside the 1.2-million-tonne-per-year ethylene unit. It reportedly applies all-electric drive technology for ethylene compressors, aiming to reduce carbon emissions compared with conventional steam-turbine-driven systems. Equipment localization is reported at over 98%.
The Phase 2 unit broke ground on May 28, 2024 and reached mechanical completion on May 21, 2026, a construction period of about 22 months. Total investment is reported at 25.656 billion yuan (some media reported a figure of 68.5 billion yuan), with a site area of about 4,644 mu (roughly 3.1 square kilometers). Once operational, this unit is expected to expand Dushanzi Petrochemical’s total ethylene capacity from 2 million t/y to 3.2 million t/y. The all-electric drive technology is reported to reduce carbon emissions by about 210,000 tonnes annually.
CNPC is pursuing a strategy of building large petrochemical complexes in western inland regions such as Tarim, Xinjiang, integrating downstream production close to crude oil and natural gas source areas, and this expansion can be seen as part of that strategy.
China’s expansion of ethylene production capacity has been a persistent trend in recent years, and this Dushanzi expansion reflects the typical Chinese petrochemical industry investment pattern of co-locating downstream production facilities with inland feedstock sources. The all-electric compressor drive technology applied in this project in particular suggests a growing trend of incorporating decarbonization into large ethylene cracker designs from the outset. If the shift from conventional steam-turbine drive to electric drive spreads more broadly, it could create new demand for suppliers of large electric motors and drive systems. Equipment localization exceeding 98% shows that China’s petrochemical plant equipment industry has reached a fairly high degree of self-sufficiency, which can also be read as a signal that entry barriers into the Chinese domestic market are rising for foreign equipment suppliers. The fact that domestic Chinese ethylene expansion continues even amid concerns over global ethylene oversupply shows that Chinese state-owned petrochemical companies weigh domestic supply stability and regional balanced development (western development strategy) as important factors in investment decisions.
Whether the full startup scheduled for September 30 proceeds as planned, and how long the initial operational stabilization period takes, are the first points to confirm. The impact of the new ethylene supply on domestic Chinese ethylene and polyethylene prices is also worth watching. In addition, which downstream products (polyethylene, ethylene glycol, etc.) Dushanzi Petrochemical plans to link this unit’s ethylene output to, and whether the low-carbon electric drive technology will be extended to other Chinese petrochemical projects going forward, also bear watching.