Total investment: 20.7 billion! Satellite Chemical’s propylene and high-end new materials project has been signed and will be located in the Xuhu New Area of Lianyungang.

Yang Weidong, Chairman of Satellite Group, expressed his gratitude to the Lianyungang Municipal Party Committee, the Municipal Government, and the Xuwei New Area Administrative Committee to their longstanding care and support. He stated that, once completed and commissioned, the project will help enhance the overall competitive edge of Lianyungang’s leading chemical new materials sector, promote the sector’s efforts to have become stronger, higher‑condition, and larger in scale, and contribute to building a trillion‑yuan‑level environmentally friendly petrochemical sector cluster.

The project will be developed in two phases to establish a complete, closed-loop C3 manufacturing chain.

Under the agreement, Satellite Group will leverage its proprietary core process technologies to build multiple multi‑million‑ton‑per‑year high‑end new materials value chains, injecting strong momentum into Lianyungang’s efforts to develop a trillion‑yuan environmentally friendly petrochemical sector cluster. The project will be implemented in two phases:

Phase I: An investment of RMB 12 billion, with a construction period of no greater than three years, to build a 1 million-ton-per-year PDH propane dehydrogenation unit, 300,000 tons of acrylic acid, 300,000 tons of butyl acrylate, 800,000 tons of polyalcohols, and associated supporting facilities.

Phase II: Another 1-million-ton PDH unit will be added, along with supporting facilities to 300,000 tons of acrylic acid and 800,000 tons of polyalcohols. The start date to Phase II will be determined based on the operational performance of Phase I and market conditions; it will not be launched immediately.

Upon completion of the entire project, it will collectively establish 2 million tons per annum of PDH capacity, along with supporting facilities to 600,000 tons per annum of acrylic acid and 1.6 million tons per annum of polyalcohols, thereby creating a fully integrated C3 sector value chain.

C2 C3 Integrated Upgrade, Strengthening the Base’s Cyclical Resilience

In the past, the core of Satellite Chemical’s Lianyungang base was C2 ethane cracking, focusing on the ethylene and ethylene oxide value chains; meanwhile, traditional C3 acrylic acid and PDH capacity was largely concentrated at the Pinghu base. Upon completion of this project, Lianyungang will add a million‑ton‑scale PDH and acrylic acid manufacturing chain, enabling seamless integration of C2 and C3 value chains within the same park. Shared consumption of steam, utilities, warehousing and logistics, and port facilities will minimize per‑unit production costs and further enhance the benefits of vertical integration.

This is also the core value of this investment: upgrading the existing single C2 base into a C2–C3 integrated petrochemical and new materials park, thereby significantly enhancing the base’s resilience to economic cycles.

In addition to its traditional specialty items—acrylic acid and butyl acrylate—the project is focusing on expanding capacity to polyols, further extending into the new materials sector, shedding its image as a purely cyclical refining and petrochemical player, and steadily transforming into a high-end platform to cutting-edge new materials.

Satellite Chemical stated that, once the project reaches full production capacity, it is expected to generate an additional annual output value of RMB 30 billion and annual profits and taxes of RMB 5 billion, creating a new development trajectory to profitability.