Core Equity Structure Definition:
Sinopec Group is the main entity responsible for overall management, with Sinopec Limited holding a controlling stake in Sinopec Shanghai Petrochemical Company Limited (SPC). The Sinopec Shanghai Petrochemical Company Limited (SPC) project, along with the Inner Mongolia large-tow carbon fiber industrialization and the clean-up transformation of its self-owned power plant, are listed as three major strategic projects of the company.
Pre-Project Initiation Motivations:
2.1 Industry Environment Pressures: Domestic demand for refined oil products has peaked, putting pressure on the profitability of traditional fuel-based refining and chemical industries. High-end polyolefins and carbon fiber-supporting chemical raw materials are highly dependent on imports. The national policy of "reducing oil consumption and increasing chemical production, saving energy and reducing carbon emissions" in the refining and chemical industry is forcing structural transformation of existing refinery capacity.
2.2 Significant Shortcomings of Existing Units:
Some of Sinopec Shanghai Petrochemical's existing refining and chemical fiber units have been in operation for many years, and their energy consumption and environmental protection indicators are difficult to meet the National VII standards for oil products and the new dual-carbon regulations. The old 700,000-ton/year ethylene process is outdated, with low feedstock conversion efficiency.
**Sinopec Shanghai Petrochemical's Existing Refining and Chemical Fiber Units:** 2.3 Implementation of the Group's Top-Level Strategy
Sinopec is accelerating its development into a world-class clean energy and chemical enterprise, establishing an integrated closed loop of "refining + new materials": upstream refining ensures low-cost raw materials, while downstream, relying on SPC, it is implementing the industrialization of large/small tow carbon fiber (T1000 small tow + 48K/60K large tow), filling the gaps in the domestic new materials industry chain. The 21.3 billion RMB technological upgrade is a key link in ensuring raw material supply for the industry chain.
Sinopec's Comprehensive Management Functions
3.1 Investment and Approval Coordination
The Group headquarters is responsible for project feasibility study review, approval of the 21.3 billion RMB investment, liaising with national and local governments on key project qualifications, and coordinating low-cost financing resources.
3.2 Complete Technology Export
Relying on the Research Institute of Petroleum Processing, Shanghai Petrochemical Research Institute, and Refining and Chemical Engineering Institute, Sinopec Shanghai Petrochemical Co., Ltd. supplies a full range of domestically produced process packages for hydrogenation, hydrogen production, ethylene cracking, and catalysts.
3.3 Engineering and Industry Synergy
The project coordinates internal engineering units to participate in the 2.4 million tons/year hydrocracking EPC bidding, setting high bidding standards; it also collaborates with its wind power and investment platforms to support the Inner Mongolia carbon fiber project, creating a complete "refining feedstock—carbon fiber—wind power" industrial chain.
3.4 Production and Sales Resource Guarantee
The project leverages its nationwide marketing network to absorb new ethylene, high-end resin, and jet fuel products, with unified allocation of hydrogen, feedstock, and utilities within the group.
Specific Project Implementation Details
4.1 Shutting Down Outdated Capacity
Eliminate 18 outdated units: shut down a 700,000 tons/year ethylene unit and multiple chemical fiber polyester units (10 in the chemical sector); eliminate 8 outdated refining units including hydrogenation, hydrogen production, and sulfur recovery units, freeing up land and energy quotas.
4.2 New Construction and Upgrades of Refining Units
1. New Construction: 2.4 million + 3 million tons/year hydrocracking unit, 1.2 million tons/year solvent deasphalting unit, 200,000 Nm³/h POX hydrogen production unit, and supporting sulfur recovery and environmental water treatment facilities;
2. Upgrades: Energy-saving upgrades to existing hydrocracking, gasoline S-Zorb desulfurization, and gas fractionation units.
4.3 New Construction of Chemical New Materials Units
Eliminate outdated ethylene capacity and construct a new 1.2 million tons/year ethylene cracking unit, with supporting butadiene extraction, aromatics extraction, high-end polyethylene, and C5 separation units. Products will be specifically supplied to upstream raw materials for carbon fiber.
4.4 Upgrades to Supporting Utilities
Ultra-low emission self-owned power plant, plant-wide waste heat recovery, comprehensive VOCs treatment, and intelligent management platform construction.
Key Technological Innovations of the Project
5.1 Localization of Hydrogenation Process
Adopting the graded and mixed hydrogenation catalyst and zoned directional hydrogenation technology from the Research Institute of Petroleum Processing (RIPP) to improve the yield of jet fuel and ethylene feedstocks; supplemented by low-temperature waste heat recovery to reduce overall energy consumption of the unit.
5.2 Low-Cost Localized Hydrogen Production
Large-scale POX gasification hydrogen production replaces the old natural gas-based hydrogen production, significantly reducing hydrogen production costs and ensuring a hydrogen supply for the entire plant's hydrogenation units.
5.3 Clean and Environmentally Friendly New Process
Compound sulfur recovery technology improves sulfur recovery rate; waste alkali liquid is rendered harmless; VOCs are incinerated in a closed system, resulting in pollutant emissions better than national standards; a CO₂ capture interface is reserved to adapt to low-carbon development.
5.4 Cracking and New Materials Technology
Domestically produced SFT large-scale cracking furnace improves ethylene conversion efficiency, mass-producing high-end feedstocks such as metallocene polyolefins, enabling on-site supply of refining feedstocks to the carbon fiber composite industry.
5.5 Intelligent Management and Control of the Entire Process
Deploying the APC advanced process control system, the entire unit is digitally optimized online, improving the accuracy of production management and control.
Subsequent Benefits of Project Implementation:
Sinopec Shanghai Petrochemical has transformed from a fuel-based refinery into a "oil products + high-end new materials" integrated refinery, resulting in a decrease in the proportion of refined oil output and a significant expansion of chemical raw material production capacity.
6.2 Strengthening of the Domestic New Materials Industry Chain: The synergy between refining and chemical technology upgrades and the carbon fiber project has created a closed loop in China, from crude oil processing to the mass production of T1000 and 48K/60K carbon fibers, breaking the overseas monopoly on high-end carbon fibers and chemical raw materials.
6.3 Industry-wide Demonstration Role: As a key national project, the model of existing refineries achieving reduced oil consumption and increased chemical production through structural upgrades without adding new crude oil processing quotas has become a benchmark for upgrading the domestic refining and chemical industry.
