SHANDONG YULONG PETROCHEMICAL CO. LTD.: A COMPREHENSIVE OVERVIEW

Shandong Yulong Petrochemical Co., Ltd. is a prominent player in China's petrochemical industry, operating a significant refining and chemical complex in Longkou, Yantai City, Shandong Province. Established with the aim of modernizing and consolidating the region's fragmented refining sector, the company has undertaken substantial projects to enhance China's petrochemical capabilities.​ 

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Source: Hydrocarbon Engineering

Shandong Yulong Petrochemical is primarily owned by private aluminum smelter Nanshan Group (51%) and provincial government-backed Shandong Energy Group (46.1%), with the remaining shares held by two local firms. ​

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Refining and Petrochemical Complex

The company's flagship project is the Yulong Island Refining and Chemical Integration Project, a massive complex designed to process approximately 400,000 barrels per day (bpd) of crude oil and produce a wide array of petrochemical products. The project is being executed in phases:​

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  • Phase I: This phase includes a 200,000 bpd crude distillation unit (CDU) and a 1.5 million tons per annum (tpa) ethylene unit. Construction began in 2020, with the first CDU commencing operations in September 2024. ​Sahm

  • Phase II: An additional 200,000 bpd CDU is under construction, aiming to bring the total refining capacity to 400,000 bpd upon completion. ​Reuters+6Enerdata+6Reuters+6

The complex also features a 3 million tpa paraxylene (PX) facility, a key feedstock for polyester fibers. ​Sahm

Technological Collaborations

To equip its complex with advanced technologies, Shandong Yulong Petrochemical has partnered with several international firms:​

  • Honeywell UOP: Providing technologies for naphtha hydrotreating, CCR Platforming™, aromatics extraction, isomerization, and toluene disproportionation. ​UOP Home+1digitalrefining.com+1

  • LyondellBasell: Licensing Lupotech T technology for two production lines dedicated to low-density polyethylene (LDPE) and ethylene vinyl acetate copolymer (EVA). ​LyondellBasell

  • Chevron Lummus Global: Supplying EST technology for a 3 million tpa slurry residue hydrocracking unit, one of the largest globally. ​digitalrefining.com

Feedstock and Supply Agreements

In February 2023, Shandong Yulong Petrochemical signed memoranda of understanding with BP and Chevron to supply its 400,000 bpd refinery. The company aims to start commercial operations of the entire complex by December 2024. ​

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Strategic Investments

In October 2023, Aramco expressed interest in acquiring a 10% strategic equity stake in Shandong Yulong Petrochemical. The potential deal would involve Aramco supplying crude oil and other feedstocks to the complex. ​Home

Operational Milestones

By November 2024, the first CDU was operating at approximately 90% capacity, processing around 182,500 bpd of crude. Trial runs for the second CDU were planned for early 2025. ​Sahm

Industry Impact

The Yulong project represents a significant step in Shandong Province's efforts to consolidate its refining industry, replacing smaller, inefficient plants with a large, integrated complex. This aligns with China's broader strategy to enhance the competitiveness and efficiency of its petrochemical sector. ​

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Shandong Yulong Petrochemical Co., Ltd. is making substantial contributions to China's petrochemical industry through its large-scale refining and chemical complex, strategic partnerships, and adoption of advanced technologies.

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