The petrochemical industry is a melting pot that makes the best use of “liquid gold”. U.S. petrochemicals have the advantages of obvious raw material resource advantages, industrial concentration, and high degree of marketization; China’s new petrochemical projects also have the advantages of low investment costs, high production efficiency, and proximity to the consumption hinterland. This article provides an in-depth comparison of the development characteristics and current situation of the petrochemical industry in China and the United States, and analyzes the advantages of domestic Hengli, Hengyi Brunei PMB, Zhejiang Petrochemical, Shenghong, Satellite Petrochemical and Maoming Petrochemical large projects. The article also includes the US petrochemical industry Layout analysis and some maps are worth collecting and reading!
In a nutshell
The United States has obvious advantages in petrochemical raw material resources, concentrated industries, and a high degree of marketization. The petrochemical industry in the United States is highly developed and has given birth to a series of great international giants. Since 2010, the rapid development of shale development in the United States has brought about a decrease in the cost of crude oil and petrochemical raw materials. In 2020, the United States will most likely become a net exporter of crude oil and petroleum products. The United States has added nearly 7 million tons of ethylene production capacity in the past five years. In 2020, the United States will add a new ethylene export facility. It is also expected that the export volume of ethane, propane, butane and other NGLs in the United States will increase.
Most petrochemical projects in the United States are concentrated in the Gulf of Mexico, and the industrial chain is concentrated, from upstream exploration and development, NGL separation, pipeline transportation, to the downstream petrochemical industry and terminal export. Collaboration is clear and market participation is high.
China’s new petrochemical projects have the advantages of low investment cost, high production efficiency and proximity to the consumption hinterland. Due to my country’s resource endowment, its dependence on crude oil imports has gradually increased. my country’s petrochemical industry has also become dominated by state-owned enterprises, while private enterprises have gradually emerged. At the same time, it has formed a multi-industry chain and diversified development pattern such as petrochemicals and coal chemicals. Compared with the United States in recent years, my country’s project construction efficiency has improved. With the same production capacity and scale, the capital expenditure of new petrochemical equipment is less than half that of the United States, offsetting the disadvantages in raw materials. At the same time, my country’s petrochemical products are located in the consumption hinterland, and the self-sufficiency rate calculated in terms of ethylene equivalent is less than 50%. Compared with the PTA-polyester filament industry chain, the global competitiveness of the petrochemical industry is expected to be comprehensively improved in the future. At the same time, the domestic petrochemical raw materials are diversified, the finished products are rich, the industrial chain is complete, and the development potential of downstream fine chemicals is huge.
For large-scale refining and chemicals, we believe that using advanced domestic and foreign technologies for large-scale integration and production capacity amplification, coupled with strong domestic supporting facilities and high production efficiency, we have strong capabilities in Capex and Opex. obvious advantage. New refineries are often equipped with hydrocracking, catalytic reforming and other devices, which can increase the output of chemical products. After refining and chemical integration, the material balance of hydrogen, light hydrocarbons, aromatics and other products can be optimized to reduce costs. At the same time, it also increases the added value of the product. For the comprehensive utilization of light hydrocarbons, taking the PDH unit as an example, raw materials remain imported, but China’s production capacity has exceeded more than 50% of the world’s. Ethane will gradually become commercialized in the future, and the model of outsourcing ethane to crack ethylene for deep processing is expected to be replicated. We believe that using low-cost NGL raw materials from the United States for deep processing in China has low investment costs. The raw materials have obvious price advantages compared to naphtha, and the cracking unit has strong flexibility.
Investment Cases
Conclusions and Investment Suggestions
Optimistic about refining and chemical integration projects. The refining and chemical integration project of a large private refining company uses a modular form to integrate domestic and foreign advanced technologies on a large scale and amplify production capacity. Coupled with China’s strong domestic supporting facilities and high production efficiency, it has obvious advantages in Capex and Opex. New refineries are often equipped with hydrocracking, catalytic reforming and other devices, which can increase the output of chemical products. After refining and chemical integration, the material balance of hydrogen, light hydrocarbons, aromatics and other products can be optimized to reduce costs. At the same time, it also increases the added value of the product.
We are optimistic about the comprehensive utilization project of light hydrocarbons. Taking the propane dehydrogenation (PDH) unit as an example, due to my country’s engineering capabilities, construction costs, operating costs and other advantages, my country’s PDH is highly competitive in the world, and its production capacity has exceeded 50% of the world’s. We believe that the model of outsourcing ethane for deep processing is expected to be replicated. There is a long-term surplus of NGL raw materials in the United States. China purchases ethane for deep processing domestically. The investment cost is low and the raw materials have a clear price advantage over naphtha.
Reason and logic
Shale development in the United States brings richness Cheap NGLs complement China’s needs. According to EIA data, in September 2019, the U.S. petrochemical industry’s NGL consumption was 2.925 million barrels/day, of which 1.518 million barrels/day of ethane, corresponding to U.S. ethylene production of 25.3 million tons/year. However, there is a large amount of unseparated NGL in the United States, with current ethane resources of 2.698 million barrels per day; the potential supply of ethane by 2025 is 3.519 million barrels per day. According to our calculations, the current available supply of ethane in the United States is approximately 58.5 million tons/year, and the potential supply in 2025 is 76.27 million tons/year. The United States’ own ethylene plants cannot fully consume its own ethane, and with improved logistics, pipelines, and export facilities, ethane exports will continue to grow.
China’s new petrochemical projects have low investment costs and are close to the consumption hinterland.While maintaining its dominant position in the third industry chain, it will also enter the carbon dioxide field with higher industry barriers. The company takes advantage of the supply of raw materials in the United States and cooperates with Energy Transfer Company to participate in upstream pipeline transportation and warehousing to ensure the supply of goods; at the same time, it cooperates with ship owners to implement the bottleneck of VLEC transportation. Take the lead in the business model and project progress of light hydrocarbon deep processing.
2. The supporting capabilities around Lianyungang and the synergistic effect of the petrochemical enterprises in the park. Lianyungang is one of the seven major petrochemical industrial parks, with complete supporting facilities for the surrounding petrochemical industry chain. Although the company purchases light hydrocarbons such as ethane, the transportation costs of its own fleet are low. The company’s cracking unit still has great flexibility, and is surrounded by supporting facilities such as pure benzene, synthetic ammonia, and EO downstream facilities. It has great potential to develop fine chemicals; and there is room for utilizing hydrogen energy in the future.
3. Main device features. The device is flexible and the space reserved for fine chemicals is large. The project adopts mature technology and has 7 cracking furnaces, one of which is spare. The scale of a single furnace is leading; and part of the cracking furnace can be retained for mixed cracking. The scale effect of EO/EG is obvious. EO is suitable for the downstream development of fine chemicals. A certain proportion of switching between EO and EG can be carried out according to market conditions. EG and by-products DEG/TEG can be sold to the unsaturated resin industry.
Donghua Energy’s petrochemical project in Maoming
20202 In a March announcement, Donghua Energy (Maoming) Co., Ltd., a holding subsidiary of Donghua Energy, invested in the construction of the “Donghua Energy (Maoming) Alkane Resources Comprehensive Utilization Project (Phase I)” in the Green Chemical and Hydrogen Energy Industrial Park in Binhai New District, Maoming City, Guangdong Province. . The project includes 2 sets of 1 million tons/year PDH units and 4 sets of 500,000 tons/year PP units, as well as the construction of supporting public works and auxiliary facilities, of which the public auxiliary facilities include storage areas and docks.
Our point of view: We believe that the company can take advantage of terminal warehousing and gradually move from traditional trade and liquefied gas distribution to production. The company has strong upstream resource control capabilities and will focus on propane dehydrogenation and hydrogen energy utilization in the future.
1. The ability to grasp resources in the upstream. The company’s traditional LPG trading volume ranks among the best in the world. It relies on warehousing resources in Ningbo, Zhangjiagang, Taicang and other places to control upstream LPG resources and improve distribution in the midstream. A complete propane-propylene-polypropylene industrial chain has been formed through system and asset matching, comprehensive industrial utilization in the downstream. As for the gradual divestment of the company’s trading sector, we believe it will help the company focus more on its main business and reduce the price volatility in the middle.
2. Downstream industry chain layout advantages. The company currently has two sets of propane dehydrogenation units, located in Ningbo and Zhangjiagang, with a total of 1.26 million tons/year of propylene and 800,000 tons/year of polyethylene. Annual propylene production capacity. The company’s third set, the Ningbo Phase II project of 660,000 tons/year propylene and 800,000 tons/year polypropylene is expected to be put into production in the first half of 2020. With the increase in production capacity, the company’s polypropylene brands and technical routes have continued to Rich, the voice in the polypropylene industry has increased.
3. Maoming has a superior geographical location. Maoming-Zhan integration is an important petrochemical base in China and has strong radiation capabilities in western Guangdong. At present, there is already a refining and chemical integration project of Maoming Petrochemical, and there will be investment in projects such as Zhanjiang Zhongke and BASF in the future. The project has a superior geographical location and a short transportation distance for purchasing raw materials from the Middle East, which will continue to deepen the company’s layout in the propane dehydrogenation industry.
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