China’s Gulei petrochemical complex makes progress

Spanish Market: Oil products, Petrochemicals
22/08/19

A long-delayed petrochemical complex at Gulei in southeast China is making some progress, after its backers secured almost $3bn in funding and began construction.

Construction work started this month on three units at the Gulei refining and chemical integration project at Zhangzhou in Fujian province. Gulei Petrochemical, a joint venture between state-controlled Sinopec and Taiwanese investors, has started building a 550,000 t/yr gasoline hydrogenation unit, 350,000 t/yr aromatics extraction unit and 130,000 t/yr butadiene extraction unit. Start-up is targeted for April 2021.

The units are part of the wider Gulei complex, which will include an 800,000 t/yr ethylene cracker and other petrochemical plants, as well as port facilities. The first phase of the project has an estimated cost of 27.9bn yuan ($3.9bn). A 320,000 b/d refinery and 1mn t/yr ethylene cracker are planned in a second phase, but the timeline for this and the full start-up of the first phase remain unclear.

The project received a boost earlier this month when it secured Yn20bn in loan funding from domestic banks including ICBC, China Construction Bank, Bank of China, Agricultural Bank of China and the China Development Bank.

The Gulei project is a 50:50 joint venture between Sinopec Fujian Petrochemical and Dynamic Ever Investment, a private-equity company owned by Taiwanese petrochemical producers, traders and investment firms.

Development has been delayed several times. Inconclusive talks between Sinopec and the Taiwanese firms were held as far back as 2012. Prospects for the project improved in 2014, when China's cabinet the state council included Gulei in its plans for seven new petrochemical bases designed to shift facilities away from residential areas.

Sinopec formed the Gulei Petrochemical joint venture in 2016, and was targeting first production by this year. But progress remained slow and the project design was only approved in August last year.

The Gulei complex will also include a 300,000 t/yr ethylene-vinyl acetate resin unit, 100,000/700,000 t/yr ethylene oxide/ethylene glycol unit, 600,000 t/yr styrene unit, 350,000 t/yr polypropylene plant, 100,000 t/yr thermoplastic elastomer plant (SBS), 200,000 t/yr propylene oxide plant and 260,000 t/yr hydrogen peroxide plant.

The seven petrochemical bases identified by the government also include Changxing island in Dalian, where private-sector Hengli is ramping up its new 400,000 b/d petrochemical-focused refinery; Lianyungang in Jiangsu province, where private-sector Shenghong Petrochemical is building a 320,000 b/d refinery; and Huizhou in Guangdong, where Shell and CNOOC operate their Nanhai petrochemical complex and ExxonMobil is planning a major downstream investment.

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