Shaanxi Yanchang Petroleum (Group) Co. is progressing a RMB80.29 billion integrated refining-petrochemical transformation and upgrading project in Yan’an, Shaanxi Province, with supporting infrastructure — including a crude oil storage facility and a pipeline — now completed in stages, it is reported.
It is reported that the project spans the Luochuan Industrial Park and the Yangshu Chemical New Zone in Yan’an’s Luochuan County. The project will close 12.4 million tonnes/year of aging refining capacity in Yan’an, Yulin and other locations, while building new atmospheric and vacuum distillation capacity of 10 million tonnes/year and a new 1.2 million tonnes/year ethylene unit, as part of a “reducing oil, increasing chemicals” transformation strategy. Following a basic supply-guarantee agreement signed between the Luochuan county government and Yanchang Petroleum on June 26, a crude oil storage facility with a RMB2.1 billion investment — comprising four 150,000m³ and four 100,000m³ tanks, for a total capacity of 1 million m³ — was completed and brought online on August 3, along with a 17km pipeline (designed capacity of 10 million tonnes/year) connecting Luochuan’s terminal facilities to the Yangshu storage site, it is reported. On August 4, Shaanxi Baotian Energy-Saving Environmental Protection Technology Co. reportedly won the pre-feasibility and feasibility study contract for a supply gas pipeline project, and on August 5 a first working-group meeting on project implementation was held in Luochuan County. The ethylene plant is reported to be linked to carbon capture, utilization and storage (CCUS) facilities, though the original reports do not name a specific licensor for the cracking process, so this remains unconfirmed.
It is reported that this project forms part of a provincial-level restructuring of Shaanxi’s refining sector, consolidating aging refining capacity while expanding petrochemical output. Yanchang Petroleum is a state-owned refining and chemical company in which the Shaanxi provincial government holds a stake, operating refining and chemical facilities across multiple locations in the province; the Yan’an project is reported to be its largest integrated transformation project to date.
Whether the State Council approves the core project, and the timing of formal EPC contract awards for the distillation and ethylene units once approved, are reported to be worth watching, along with the actual timing of the planned closure of the 12.4 million tonnes/ year of aging refining capacity.