China kicks off US$20 billion petchem/refinery project

China has started on its US$20 billion mega petrochemical and refining complex in east China’s Shandong province, local state media reported. Known as the Yulong project, it will be built in Yantai, Shandong, China’s hub for independent oil refineries. It is made up of a 400,000-bpd oil refinery, a 3 million-tonne/year ethylene plant and other derivatives.

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The project is one of nearly 500 key industrial projects that started construction in Shandong province last week with total investment of US$81.26 billion), according to the local media report.

The report did not provide further detail about the financing for the project or when the construction be will completed.

The complex, with investment led by private aluminium smelter Shandong Nanshan Group, adds to China’s recent wave of petrochemical investments, which have been led by the private sector and drawn global giants such as BASF and ExxonMobil to build complexes in the world’s top petrochemical consumer and importer.