The olefin industry will continue to grow

It is understood that China's domestic olefin industry started relatively late, but it has developed rapidly during the "11th Five-Year Plan" period. According to analysis, China's olefin industry has a promising future and will continue to develop.

Since the 1970s, after more than 40 years of development, China’s ethylene industry has surpassed Japan by the end of the “Eleventh Five-Year Plan”, ranked second only to the United States, and ranked second in the world, thus becoming one of the world’s largest petrochemical countries. The annual output accounts for 10% of the world and 30% of Asia. Taking Sinopec Group Maoming Petrochemical Company as an example, as of November 22, 2012, cumulative production of ethylene reached 10.33 million tons in 16 years, becoming China's first ultra-million-ton ethylene refinery.

“In the initial stage of the development of China’s olefin industry, due to restrictions on raw materials, production technology, and investment scale, the capacity of new equipment on a single set was generally small. Entering the “Twelfth Five-Year Plan”, the country clearly proposed that the new olefins plant should follow the scale and raw materials. The principle of diversification: According to national plans, by the end of the “Twelfth Five-Year Plan”, China’s ethylene production capacity will reach 27 million tons, which is to increase 12 million tons on the basis of an annual output of 15 million tons in the “Eleventh Five-Year Plan” period. In the “Twelfth Five-Year Plan”, the capacity of a single set of equipment with crude oil/naphtha as the raw material for new construction cannot be lower than 700,000 tons/year.For example, Fushun Petrochemical’s 800,000 tons/year ethylene plant has been implemented one time ago. After successful implementation, Fushun Petrochemical's 10 million-ton oil refining and one-million-ton ethylene projects were fully completed and put into production, and among these ethylene projects that are planned to be put into operation, most are large-scale projects with an annual output of 1 million tons.

While emphasizing scale, the “Twelfth Five-Year Plan” also emphasizes diversification, which mainly refers to diversification of raw materials for olefin production. Traditionally, raw materials for olefin production in China mainly come from naphtha, which naturally consumes a lot of crude oil, while China’s crude oil needs large imports. At the same time, China is also a country rich in coal resources. Therefore, in the “Twelfth Five-Year Plan”, the country proposed the diversification of olefinic raw materials, mainly to encourage the development of coal to olefins. The pilot project in this area has already started during the “Eleventh Five-Year Plan” period. In the two years that have passed since the “Twelfth Five-Year Plan” period, China’s coal-to-olefins gradually transitioned from the demonstration phase to the commercialization phase. For example, the Shenhua Baotou project achieved good economic benefits and verified the feasibility and economy of coal-to-olefin technology.

Qi Min said: “In order to reach the goal of producing 27 million tons of ethylene per year at the end of the 12th Five-Year Plan period in 2015, the olefin industry in China will continue to develop rapidly over the next three years. The total production capacity of coal through methanol to olefins will reach 400-500 million tons, accounting for more than 20% of the total ethylene production capacity in China."