Sinopec Completes $5.7bn Expansion at Zhenhai Refinery, Strengthening Petrochemical Production

Sinopec, one of China’s largest state-owned oil and gas companies, has finalized a $5.7 billion expansion project at its Zhenhai Refinery in Zhejiang Province. The completion of Phase 2 of the expansion increases the refinery’s processing capacity to 40 million tonnes annually. This positions the refinery as a key player within the Zhejiang Ningbo Petrochemical Industrial Base, a crucial hub for downstream industries in the Yangtze River Delta.

Enhancing Refining and Petrochemical Capacities
The Zhenhai Refinery now boasts a total refining capacity of over 50 million tonnes per year, solidifying the Zhejiang Ningbo base’s status as a leader in refining and petrochemical production. The expansion incorporates 18 new production units, including atmospheric distillation, catalytic cracking, and propylene production, aimed at diversifying the refinery’s output and boosting supply chains for advanced materials and specialty chemicals.

The new facilities are designed to produce 8 million tonnes of petrochemical products annually, primarily for automotive, textiles, and home appliances sectors. These enhancements are expected to significantly contribute to the growing demand for high-end polyolefins and other chemicals, reinforcing Sinopec’s position as a global leader in the petrochemical market.

Economic Impact and Strategic Position
Sinopec’s investment in this refinery expansion is expected to generate significant economic impact, with trillions of yuan in value expected to flow into both upstream and downstream industries. The expansion also increases the ethylene production capacity to 2.2 million tonnes annually, enabling Sinopec to better serve the demands of key industries, including those in the automotive and consumer goods sectors.

The upgraded refinery’s capabilities align with Sinopec’s strategy to secure a strong position in the rapidly evolving petrochemical landscape, ensuring a consistent supply of advanced materials for critical industries.

Zhenhai Refinery’s Historical Significance
Originally established in 1975 as the Zhejiang Refinery, the Zhenhai Refinery has been integral to Sinopec’s operations. Following its integration into China Petrochemical Corporation in 1983, it underwent significant restructuring, eventually being renamed Sinopec Zhenhai Refining and Chemical. The refinery’s expansion and integration of high-end chemical production have positioned it as Sinopec’s largest integrated refining and chemical operation, reflecting its ongoing importance in the energy and petrochemical sectors.