Catalytic Reforming Capacity at Shandong Independent Refineries

As of the end of 2017, China’s catalytic reforming capacity was 74.38 million mt/a. Therein, the catalytic reforming capacity at Sinopec was 33.93 million mt/a and 24.05 million mt/a at PetroChina. The catalytic reforming capacity at Shandong independent refineries was 15.40 million mt/a, taking up around 19% of China’s total reforming capacity. The CDUs capacity at Shandong independent refineries took up around 20.4% of China’s total CDUs capacity.

But the percentage of reforming capacity against CDUs capacity at Sinopec and PetroChina is higher than 11% respectively, while the percentage at Shandong independent refineries is only 9.07%.

According to SCI, Shandong independent refineries are active to build reforming units. First, China’s gasoline and diesel quality upgrade is speeding up. The gasoline and diesel at National V Standard covered all over China from January 1, 2017. In addition, National VI Standard gasoline and diesel are scheduled to cover all over China from January 1, 2019. In order to meet the market demand, Shandong independent refineries need to upgrade their units and extend their industry chains. Catalytic reforming units can produce gasoline components with high octane ratings. This reduces the independent refineries’ dependence on imported mixed aromatics and helps the refineries to meet the requirements from further upgrades in gasoline standard.

Second, reforming units can produce important basic chemicals, such as benzene, toluene and xylene and so on. This helps the independent refineries to extend their industry chains. In addition, the refineries need not pay consumption tax for benzene, toluene and xylene. This brings high profits to the independent refineries.

Third, another important by-product at the reforming units is hydrogen gas. And the hydrogen gas is an important feedstock for the refineries hydrogenation units, such as hydro-refining units, hydro-upgrading units and hydro-cracking unit. This helps the refineries to reduce their feedstock costs.

Fourth, the naphtha output at Shandong independent refineries increased a lot in 2016 and 2017. Accordingly, naphtha prices were at low levels for a long time. But naphtha is an important feedstock for the reforming units. More reforming units mean more demand for naphtha, and the reforming units can produce some value-added products with naphtha.

Finally, the average profit at Shandong independent refineries’ reforming units was at a high level in 2016 and 2017. The investment in one reforming unit can be returned in around one year. This is also an important reason for the independent refineries to build catalytic reforming units.