Lanzhou Petrochemical 23.17 billion Ethylene Transformation Project Pre-feasibility Study Passed: 1.2 million Tons of Cracking System Shaped, Western Chemical Pattern Reshaped

Recently, the preliminary examination and evaluation meeting of the pre-feasibility study report of the transformation and upgrading ethylene transformation project of PetroChina Lanzhou Petrochemical Company came to a successful conclusion. February 5 the safety conditions review will be successfully passed, and two key reviews have been completed one after another, marking this total investment of about 23.17 billion yuan the overall promotion of major projects officially accelerated. The project is located in Xigu Chemical Industry Park of Lanzhou City, focusing on the three major tracks of "new energy, new materials and new undertakings". It takes solving the historical bottlenecks of old installations such as low energy efficiency, high safety risks and high environmental protection pressure as the starting point, and is positioned to lead the western chemical industry cluster with the posture of chain leader.

Full analysis of the three major transformation schemes in 1.: new and old, refining and chemical synergy, downstream chain extension.

Ethylene transformation is the core axis of the whole project. Scheme through new 1.2 million tons/year ethylene cracking quench unit new 800000 tons/year separation system(including pyrolysis gas compression, ethylene compression, propylene compression unit), while using 460000 tons/year ethylene separation system and shut down the existing 240000 tons/old ethylene plant, finally formed * * "one head and two tails" 1.2 million tons/year ethylene production system * *. The subtlety of this design lies in the use of the old and the new-fully revitalizing the stock of assets to reduce investment costs, simultaneously shutting down backward devices to completely solve the hidden dangers of energy efficiency and safety and environmental protection, and realizing a leap in production capacity through system integration.

Refining transformation focuses on raw material protection, does not expand the scale of crude oil processing. The scheme does not change the existing crude oil processing type and processing volume, but rather 1.2 million tons/year catalytic cracking unit, 3 million tons/year diesel hydrogenation unit, 1.2 million tons/year diesel hydrogenation unit adaptive transformation, synchronous in the refining area of the new PSA unit and carbon two recovery unit, to achieve refining synergy, efficient conversion of raw materials on the spot, for ethylene cracking system to provide a stable supply of raw materials.

Downstream supporting the new 7 sets of equipment, is the transformation of the most direct impact on the market part. Specific scale is as follows: full density polyethylene 450000 tons/year polypropylene 400000 tons/year2. Pyrolysis gasoline hydrogenation 700000 tons/year aromatic hydrocarbon extraction 700000 tons/year, EVA 140000 tons/year, POE 100000 tons/year, Octene -1 20000 tons/year at the same time, the existing 170000 t/a HDPE plant will be converted ultra high molecular weight polyethylene 60000 tons/year.

Need to focus on **POE (100000 tons/year) and EVA (140000 tons/year) * * two varieties-both are photovoltaic film and new energy vehicle core raw materials, long-term high dependence on imports, domestic substitution demand is urgent, this large-scale supporting layout will have a direct impact on the existing import supply pattern. Ultra-high molecular weight polyethylene is a high-barrier special material track, the added value is significantly higher than the general material, but also worthy of continuous tracking of the key varieties.

2. industry impact research: the western integration of the leading formation, multi-category supply chain needs to look forward to layout.

After the completion of the project, Lanzhou Petrochemical will be transformed from a traditional petrochemical enterprise with oil refining as the core, into one with 1.2 million tons/year ethylene cracking capacity, across the polyolefin, special materials, aromatics three major plates of the western chemical integration leader, the depth and breadth of the industrial chain will jump significantly.

Core advice for overseas traders and supply chain practitioners: at present, the project is at the pre-feasibility study passing node, and there is still a window period before production. However, in view of the new capacity of POE, EVA, ultra-high molecular weight polyethylene and other high import-dependent varieties, it is suggested to evaluate the export strategy to China in advance, closely track the project's subsequent feasibility study approval, start-up and production time nodes, focus on the potential switching of polyolefin and special material supply structure in the western region, and early layout to deal with the double impact of price and channel after the release of capacity.