Published December 2018
Crude oil-to-chemicals (COTC) technology involves configuring a refinery to produce maximum chemicals instead of traditional transportation fuels. COTC complexes elevate petrochemical production to an unprecedented refinery scale. Because of the huge scale as well as the amount of chemicals that each COTC complex produces, COTC technology is one of the most important and imminent developments in the last three years, and will profoundly affect the global petrochemical and refinery industries.
Section 1 of this report starts with an introduction of recent COTC projects—already started or announced by various Chinese companies and by Saudi Aramco and SABIC—to explain the strategic implications. Among these projects, Hengli Petrochemical’s refinery-PX (para-xylene) complex is at the most advanced stage. The plant is being constructed and is expected to start a trial run in late 2018. When completed, the complex is expected to produce 4.34 million tons of PX per year, in addition to 3.9 million tons of other chemicals. This complex, together with two other similar projects in China, will significantly change the supply/demand balance of PX in China and around the world. Hence, we chose Hengli’s complex to be the focus of this report.
Section 2 summarizes the overall PX production costs of Hengli’s refinery-PX complex, comparing them with PX market price under a wide range of oil price scenarios. This report represents a major undertaking by the IHS Markit Process Economics Program (PEP), and is the first independent assessment of a COTC commercial project. The report should be of interest to all companies seeking to gain insights on how COTC technology works and its potential impacts and implications.
Section 3 provides a discussion of various COTC conversion routes and explains the difference between COTC and other approaches. It is followed by a progress report of the major COTC projects. In the end, we have provided the top-level market overview of PX to evaluate the potential market impact of the three refinery PX complexes in China.
The objective of this report is to elucidate Hengli complex’s configuration and the technologies employed, and to assess the production economics of the complex. Section 4 provides a technology review of the configuration and major processes, divided into seven sections—crude distillation, light ends conversion, hydrocracking, aromatics complex, coal gasification, residue de-asphalting and gasification, and lube base oil production. Section 5 presents the production economics of the processes grouped by the seven sections in the complex, and section 6 presents the process economics of the entire complex as well as a scenario analysis.