Shandong's oil refineries have shifted from relying on "scale advantages" to leveraging "quality advantages".
Innovative breakthroughs, integrated refining and processing, reducing oil content while increasing chemical content, reducing oil content while enhancing special properties
After the Spring Festival, the 300,000-ton/year crude oil catalytic cracking for olefin production (UPC) technology trial project of Shandong Dongming Petrochemical Group resumed work rapidly. It is planned to be completed and put into operation within this year. This major project, which was initiated from its inception and has attracted much attention, is pushing forward a technology that converts crude oil into olefins in one step, which was once regarded as "impossible" by the industry, to the critical point of industrialization.
Under the backdrop of energy transition, the "dual carbon" goals and the requirements for high-quality development, enterprises like Dongming Petrochemical in Shandong Province, as representatives of local refineries, are taking a series of major projects as the starting point to transform towards a direction of "refining and chemical integration, high-end products, and green and low-carbonization", accelerating the transition of the industry from "scale advantage" to "quality advantage".
In recent years, multiple pressures from both domestic and international sources have combined, pushing the local refineries in Shandong to the historical crossroads where they either need to undergo transformation or face elimination.
"The key to breaking through lies in the disruptive innovation of core technologies." Ding Shubing, the president of Shandong High-Tech Chemical Research Institute and the vice president of Dongming Petrochemical Group, said that the UPB project of Dongming Petrochemical has a total investment of 11.07 billion yuan. It is the world's first industrial demonstration project of UPB technology, pioneering a new path of "short process, high efficiency, low emissions, and high yield" for converting crude oil into olefins, providing a brand-new solution for the upgrading of industry processes. After the project is put into use, it can establish a full-chain, high-value industrial system from a drop of oil to high-end materials.
Industry insiders believe that currently, most of the main refineries in Shandong focus on high value-added products and differentiated routes. Following the development strategy of "oil conversion" and "oil transformation into specialty products", they aim to increase the production of high value-added products and flexibly transform chemical light oil. This enables real-time dynamic adjustment and optimization of raw material allocation and product structure, achieving economic growth and green and low-carbon reduction. The main transformation path is to reduce oil and increase chemicals, that is, to lower the proportion of refined oil and increase the yield of chemical products to over 30%, develop basic chemical raw materials such as ethylene and propylene, and then develop downstream high value-added products.
In this direction, many petrochemical enterprises in Shandong have embarked on a path of differentiated transformation. In Heze, Dongming Petrochemical has invested 73.8 billion yuan to build a petrochemical integration project, planning to construct a refinery with an annual capacity of 15 million tons, an ethylene plant with an annual capacity of 1.6 million tons, a 220,000-ton aromatics xylene plant, and downstream supporting facilities. Through the interconnection of 36 process units, the proportion of chemical products has been increased from 45% to over 60%. In Dongying Port, the Fu Hai (Dongying) Petrochemical demonstration project for the low-carbon reconfiguration and comprehensive utilization of aromatic raw materials has an investment of 31.8 billion yuan. It plans to build 22 process units, including a 15 million-ton atmospheric and vacuum distillation unit and a 220,000-ton continuous reforming unit, which can produce more than 10 kinds of high-value-added chemical products. In Zibo, the Xintai Petrochemical project for the comprehensive utilization of alkanes and the green and low-carbon olefin integration project have an investment of 18.7 billion yuan. They plan to build 19 chemical new materials and special chemical production units, and after full operation, they can complete the industrial chain layout of "crude oil - olefin - polyolefin". The added value of chemical products has been increased by more than 80%. In Yantai, the downstream extension project of Yulong Petrochemical with an investment of over 100 billion yuan extends to POE elastomers, nylon 66 and other more than 50 kinds of high-value-added new materials, building a "crude oil - olefin - aromatics - high-end new materials" full industrial chain loop, and increasing the added value of chemical products by more than 80%.
The 2025 government work report of Shandong Province stated that "we aim to have the projects such as the integrated refining and chemical complex of Dongming Petrochemical and the upstream and downstream supporting facilities of PX in Dongying Port approved and implemented." Currently, these projects are in the process of securing all necessary resources and fulfilling the approval procedures as per the plan.
For medium-sized refineries that do not have the financial capacity for large-scale investment, many enterprises have shifted their focus to producing differentiated products such as special oils, high-end solvents, and lubricant base oils. For instance, Jingbo Petrochemical specializes in high-end special oils and lubricants, Shandong Haikoo produces high-end solvents and chemical fiber raw materials, and Qi Cheng Petrochemical focuses on the comprehensive utilization of carbon four to produce clean fuel additives.
Among the enterprises that have shut down their traditional refining capacity, some have changed their strategies and ceased production to switch to new lines of business. Others have moved to new sectors. Hengyuan Petrochemical has shut down its traditional refining facilities and, leveraging its existing carbon resource base, has shifted to producing high-value-added products such as needle-shaped carbon black and other advanced carbon materials. These products are used in lithium battery anodes and ultra-high power electrodes, achieving a magnificent transformation from "refining crude oil" to "refining materials".
