25 Billion 600 Million US Chemical Projects To Build Up Guangdong Province To Attract Foreign Investment And Speed Up

At the end of May, the first batch of BASF Guangdong new integration base in Zhanjiang City, Guangdong province was officially piled up, marking the project's total investment of up to US $10 billion officially entering the civil construction stage.

Within a month, BASF, Exxon Mobil and Shell announced the progress of investment projects in China.

In April 30th, the Guangdong Huizhou ethylene project, which was independently invested by ExxonMobil for 10 billion US dollars, was officially launched in the week. In May 17th, the three phase ethylene project of Shell, China Sea, held a "cloud signing ceremony" in Guangzhou, Beijing and Holland Hague three places, with a total investment of 5 billion 600 million dollars.

In fact, this year, affected by the epidemic, global oil prices have accelerated to decline. Exxon Mobil and Shell have announced cuts in spending and selling assets. Exxon Mobil has even suffered huge losses. Under such circumstances, it has not hindered their further increase in China.

Coincidentally, the three major petrochemical projects signed in less than three months before and after 2018 had real landing progress in less than two years. These progress not only reflected the "Guangdong speed" of foreign capital landing, but also showed the confidence of foreign enterprises in the Chinese economy to overcome the epidemic situation and achieve greater development.

"Observing the attitude of these three companies to the project is not difficult to find that they still attach great importance to China's ongoing reform dividend, and we can see that their spontaneous driving force is very strong." Li Li, director of China studies, told reporters that "the resumption of China's economy has entered a good period. Under the promotion of all sides, the progress of the project is very fast and the efficiency is very high."

Three major projects continue to fall

Before 2018, when foreign chemical giants entered China, they had to choose the mode of cooperation with Chinese enterprises, but after 2018, with the deepening of reform and opening up, foreign giants could invest in chemical enterprises alone.

And BASF is the first foreign investment enterprise to build independent investment projects. Less than two years after the memorandum of understanding was signed in July 2018, BASF petrochemical project started construction in Zhanjiang.

In the same year, after two months of Investment announced by BASF, Exxon Mobil also announced that it invested billions of dollars in building a chemical complex project in Huizhou, Guangdong province. In October, Holland Royal Shell announced its cooperation with CNOOC in developing the South China Sea project, which means that the multinational company's first breakthrough was "upstream".

"The long term cooperation between Shell and CNOOC in the Dayawan area is a world-class petrochemical joint plant." After the recent progress of the project, Zhang Xinsheng, chairman of Shell China group, told the newspaper reporter that "the signing of this Agreement fully demonstrates our strategic partnership of cooperation with China and Huizhou."

China is the world's largest chemical market, accounting for about 40% of the world's market share. In the chemical market, ethylene is one of the largest chemical products of consumption and consumption. Ethylene production has also become an important symbol to measure the development level of a country's petrochemical industry.

In 2019, China produced more than 20 million tons of ethylene per year, and its total capacity exceeded 30 million tons per year, ranking second in the world after the United States. From the domestic point of view, Guangdong is ranked first in the country, both in terms of output and capacity. The province sits on the four major petrochemical industrial bases in Zhanjiang, Maoming, Huizhou and Jieyang, all of which are equipped with one million tons of ethylene production capacity.

The entry of the three major chemical giants not only strengthens the advantages of Guangdong's chemical industry, but also helps to build a world-class petrochemical base in Guangdong, Hongkong and Macau, and further enhance the competitive advantage of Guangdong, Hongkong and Macau.

Based on Guangdong radiation Asia Pacific

From three companies' recent statements, it is easy to see that the choice of promoting investment in Guangdong is not just to meet China's chemical market.

"Such a large-scale investment is also in Guangdong. It not only sees the development potential of the big bay area of Guangdong, Hongkong and Macau, but also allows Guangdong to radiate the recently released coastal FTA and its surrounding countries." Li Li told reporters, "from a global perspective, these companies actually lack a base in the Asia Pacific region, and Guangdong is a very good choice in terms of location."

Taking BASF as an example, the capacity of 1 million tons / year ethylene cracking plant in Zhanjiang was completed in 2026 as the starting point for a series of highly integrated (Verbund) downstream high value supply chains. The project will be completed around 2030. After the completion of the project, it will become the third largest integrated production base of BASF after Germany Ludwigshafen and Antwerp.

BASF said that the investment project in Zhanjiang is particularly unique. The integration project will not only be a combination of "refining and cracking device", but also will extend to the downstream, producing special products and covering the whole industrial chain.

In the four largest petrochemical industrial bases in Guangdong Province, the total capacity of ethylene production is one million tons, of which two (Maoming and Zhanjiang) are Sinopec.

Maoming is particularly important for Sinopec, its annual refining capacity exceeds 20 million tons and ethylene 1 million 100 thousand tons. Sinopec has announced a new 200 billion yuan investment plan. Maoming has become the world's top refining and chemical base, and there will be further expansion plans. Zhanjiang is Sinopec and Kuwait National Petroleum Corporation (1:1) joint venture Sinopec refining and chemical integration location, with a total investment of 59 billion 13 million yuan, annual processing crude oil 15 million tons, production of ethylene 1 million tons. The project is currently the largest under construction project in SINOPEC.

Huizhou is the largest oil refining and chemical integration base of CNOOC in the country. After the completion of the two phase of last year's project, its annual refining capacity exceeds 20 million tons, and ethylene exceeds 2 million 200 thousand tons. At the same time, it is one of the seven chemical bases in the national "13th Five-Year plan". In recent years, it has attracted more than 160 billion yuan of investment in petrochemical industry.

Jieyang is an important base for PetroChina in Guangdong. The annual refinery capacity of PetroChina's Guangdong petrochemical refining and chemical integration project is 20 million tons, which will be formally put into operation before the end of this year.

It is not difficult to see that competition in the petrochemical industry in Guangdong will be very intense in the future. This will be a completely open and competitive market, and the technology, management and operation efficiency of each will be the key to competition.