Zhenhai Petrochemical Begins Upgrade Project to Boost Refining Capacity by 490,000 Barrels per Day

Researched by Industrial Info Resources (Sugar Land, Texas)-- China Petroleum & Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing) and Zhenhai Petrochemical Company Limited have begun construction on an upgrade project to boost Zhenhai Petrochemical's refining capacity by more than 490,000 barrels per day (BBL/d). The company is also working on a $3.24 billion, 1 million-ton-per-year ethylene project.

The upgrade project is an effort to bring Zhenhai Petrochemical's refining facilities to modern standards. The project entails the remodeling of an atmospheric vacuum unit, the construction of more processing facilities as well as secondary facilities, and auxiliary infrastructure for public use. The main goal of this project is to adjust the makeup of the facilities to improve their adaptability to low-quality crude oil. It is expected that an integrated petrochemical-production platform will be established. This could lead to an increased production of ethylene materials, an adjustment to the balance of percentage of diesel and gasoline production, an improvement in quality of refined oils, increased hydrogen production, and higher levels of environmental and safety standards. The capacity of the atmospheric vacuum unit will be expanded from about 107,000 BBL/d to about 171,000 BBL/d.

The ethylene project is expected to add about 428,000 BBL/d of refining capacity and 1 million tons per year of ethylene capacity to create one of China's largest refining and petrochemical integrated production bases. Both projects are slated to be finished in September 2009.

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