PetroChina’s Dushanzi Petrochemical has completed mechanical completion of its Tarim Phase 2 ethylene project in Kuerle, Xinjiang, and is reported to be targeting a startup (feedstock introduction) date of September 30, 2026. The large-scale petrochemical expansion project comprises a 1.2-million-tonne-per-year ethylene unit and 11 downstream units.
The project is centered on a 1.2-million-tonne-per-year ethylene unit, with 11 downstream units reported to include two 450,000-tonne-per-year full-density polyethylene (PE) units, a 300,000-tonne-per-year low-density polyethylene (LDPE) and ethylene-vinyl acetate (EVA) unit, and a 450,000-tonne-per-year polypropylene (PP) unit. The facility is reported to be built primarily on domestically developed technology, with an equipment localization rate exceeding 98%; no separate overseas technology licensor has been identified.
Total investment is reported at 21.88 billion yuan for the core ethylene unit, or 25.656 billion yuan when including auxiliary facilities such as a green, low-carbon demonstration process, with figures varying slightly across sources. Mechanical completion was achieved on May 21, 2026, with startup targeted for September 30, 2026.
PetroChina is reported to have continued expanding its Tarim-area petrochemical complex in connection with Xinjiang’s crude oil and gas resources. This Phase 2 project follows the existing Phase 1 facility and is seen as part of the broader expansion of petrochemical production capacity in northwestern China.
This project illustrates that China has developed the capability to build and operate large-scale ethylene and polyolefin complexes using domestic technology even in its northwestern inland regions. The equipment localization rate exceeding 98% suggests that China’s petrochemical equipment industry has reached a substantial degree of self-sufficiency, aligning with the broader recent trend of reduced reliance on overseas licensors and equipment suppliers. As additional commodity resin capacity for polyethylene and polypropylene comes online, concerns about oversupply of polyolefins within the Asian region could resurface. At the same time, the Xinjiang region is known to be cost-competitive in terms of feedstock (crude oil and gas) procurement within China, giving it a different cost structure compared to coastal complexes, which is also worth factoring in. For downstream companies, this expansion could accelerate the trend of import substitution as domestically produced polyolefin supply increases.
Whether the startup scheduled for September 30 actually occurs on that date, and how long it takes to reach normal operation, are the first points to confirm. The sequential startup timing of the 11 downstream units is also worth watching. How this expansion affects polyethylene and polypropylene prices in China and supply-demand balance across the Asian region is another point to watch. Whether PetroChina plans further expansion in the Xinjiang region also remains to be confirmed.