Total investment 5.6 billion bid landing! Shanghai Petrochemical 1.2 million tons of ethylene supporting 400000 tons of FDPE project entered the stage of comprehensive construction

on October 18, the core bid section of Shanghai Petrochemical's comprehensive technological transformation and upgrading project completed the bid-winning publicity. Sinopec Engineering Construction Co., Ltd. (Sinopec 10th Construction Co., Ltd.) won the EPC general contract for 1.2 million tons/year ethylene plant, 400000 tons/year FDPE polyethylene plant and supporting projects with a construction period of 822 days, marking the formal transfer of the project from the bidding stage to the construction stage.

This bid section includes 9 main projects in total: 1.2 million tons/year ethylene plant, 400000 tons/year FDPE polyethylene plant, ethylene fire water booster pump station, ethylene circulating water field, ethylene condensate water station and heating station, four sets of cracking combined substations in China, four sets of cracking regional cabinet rooms in China, elevated ground flare facilities, flare gas recovery facilities, and complete public works, it can simultaneously support the stable operation of ethylene cracking and downstream high-pressure polyolefin.

the total investment of the entire Shanghai Petrochemical upgrading project is 21.307 billion yuan, and the source of funds is self-raised by the enterprise. It will be officially launched in June 2025 and the main unit will be put into production within 2028. The core idea of the project is refining total plate does not expand production, chemical production capacity significantly upgraded.: Maintain 14 million tons/year crude oil processing capacity unchanged, shut down the original 700000 tons/year ethylene and other 18 sets of old equipment, to replace the old, optimize the oil structure, improve the proportion of new chemical materials output.

In addition to the ethylene and FDPE units in this bid section, the project has a total of 8 new chemical units. The remaining units include 200000 tons/year butadiene extraction, 700000 tons/year pyrolysis gasoline hydrogenation, 400000 tons/year aromatics extraction, 300000 tons/year vinyl acetate, 100000 tons/year carbonate and 200000 tons/year C5 separation, which completely cover high value-added product lines such as ethylene downstream basic raw materials, C5, aromatic hydrocarbons and vinyl acetate, form an integrated material mutual supply system.

This bid section is most concerned by the polyolefin trade end is the 400000-ton/year FDPE flexible high-pressure polyethylene device, which supports brand switching and can flexibly produce LDPE and EVA, which is the scarce flexible high-pressure polyolefin production capacity in the Yangtze River Delta.

1. Supply end change: At present, the domestic photovoltaic-grade EVA supply is concentrated in the northwest, North China a few enterprises, East China local EVA effective production capacity is less, regional traders, downstream photovoltaic film, foaming, coating enterprises long-term dependence on cross-regional transfer. After this device is put into operation, it can replenish EVA supply nearby, reduce the logistics cost of EVA in East China, and increase the local supply of LDPE film material and coating material, so as to relieve the supply pressure of LDPE tight balance stage in the region.
2. Competition logic this renovation belongs to stock replacement, eliminating 700000 tons of old ethylene and building 1.2 million tons of new ethylene, with a net increase of 500000 tons of ethylene. The increment is all oriented to high value-added new materials, not low-end general materials, and is in line with the main line of domestic refining to new materials. Relying on the original storage, wharf and tank area of Shanghai Petrochemical Company, it has significant logistics advantages and is more attractive to downstream products factories in the Yangtze River Delta.
3. Trade-side risks and opportunities: There is still a long period for production in 2028, which will not impact the existing market in the short term, but will change the EVA regional pricing benchmark in the medium and long term. For traders, they can lock in the long-term supply channels in advance and pay attention to the supply chain opportunities brought by the increment of vinyl acetate, butadiene, carbon five and other supporting products. At the same time, it should also be noted that the supply of some old brands of LDPE and by-products will shrink.

From the perspective of regional industry, Shanghai Petrochemical's technological transformation is also an important chemical starting point for Shanghai's "North-South Transformation" strategy. In Shanghai, where land resources are tight, it does not add new land and relies on the technological transformation of stock parks to expand production of new materials, which represents the transformation direction of large coastal refining and chemical enterprises. Subsequent similar technological transformation, oil reduction and chemical increase projects in other refineries in the Yangtze River Delta deserve continuous tracking.