The reporter recently learned that the draft of the “About Implementation Plan for Further Improving the Localization of Large Petrochemical Equipment†issued by the National Development and Reform Commission has been issued to large-scale petrochemical state-owned enterprises such as PetroChina and Sinopec. The “Program†details the list of petrochemical equipment products that are prohibited from importing and restricting imports, and gives support and tilt policies to domestic equipment in the first set of equipment use and major equipment procurement management. Not long ago, the Ministry of Finance also introduced the relevant specific policies to implement the first purchase system and promote the government procurement of independent innovation products. These policies have been issued in succession, marking the fact that after the State Council held a meeting to accelerate the revitalization of the equipment manufacturing industry in Xi’an in June 2006, the Chinese government’s support for the localization of major technical equipment is entering a substantive stage.
Domestic equipment market averages 75 billion yuan annually
Large-scale petrochemical equipment is one of the 16 major technical equipments identified by the country as a key development. According to the discussion paper, during the "11th Five-Year Plan" period, the goal of localization of petrochemical equipment will reach 75%.
It is understood that it is at this stage that the demand for domestic petrochemical equipment is the most vigorous. The scale of newly built refineries in China will basically reach 8 million to 10 million tons, and the new ethylene projects will reach 800,000 to 1 million tons. Relevant experts stated that according to this goal, China’s equipment manufacturing industry will have a market of 75 billion yuan in the total demand for equipment in the petrochemical industry in the country each year.
In view of the fact that China’s large-scale petrochemical projects basically introduce advanced foreign technology and domestic equipment is difficult to participate in bidding, the discussion paper proposes that the localization of large-scale petrochemical equipment should be seized from the source and from the tendering process, and that the petrochemical enterprises should submit equipment when new projects are required. The list, in which equipment that has been domestically capable and has been promoted for use in China, will be banned from import. For those that have domestic production capabilities but have not yet been promoted, the government will restrict imports through taxation policies.
The non-imported equipment proposed in the discussion draft includes: 800,000 to 2 million tons of hydrocracking reactors, 700,000 tons of cracked gas compressors, and 300,000 tons of propylene compressors. The 1 million tons of cracked gas compressors and propylene compressors, 600,000 tons of PTA air compressors and other equipment are listed as restricted imports.
Give priority to supporting national key projects
Dr. Zhang Xiaofeng, deputy general manager of Beijing Inoweisen Science and Technology Co., Ltd., engaged in large-scale petrochemical engineering technology contracting, believes that at present, the design and manufacturing capabilities of China's petrochemical equipment manufacturing industry have reached a considerable scale and technological level, and most petrochemical equipment can be designed and manufactured on their own. Some equipment has reached the international advanced level. The localization rate of oil refining equipment has reached more than 90%; the local production rate of ethylene equipment with an annual output of 300,000 tons has reached more than 80%; some equipment of PTA equipment has also achieved localization. This has, to a large extent, changed the situation in which China's petrochemical plant equipment has long depended on imports. The one million-ton ethylene core equipment also achieved breakthroughs and began to be applied. There is no need to repeat the introduction.
Maoming Petrochemical has an annual output of 1 million tons ethylene ethylene cracker compressors, cold boxes and other key equipment, a total of 510 equipment in 448 Taiwan is domestic manufacturing, localization rate of 87.8%, the first use of domestic technology and equipment localization of the highest recording. The operation of the Shenyang Blower Plant for Maoming Petrochemical with a single-phase capacity of 640,000 tons/year of cracking gas compressors shows that the unit performance has reached the international advanced level, ending the passive situation in which million-million-ton ethylene cracked gas compressors must rely on imports.
The discussion paper also clarified that it is necessary to rely on key projects to promote the localization of major technology and equipment. At present, the state's key projects are Zhenhai, Tianjin, and Fushun's one million-ton large-scale ethylene projects. For these projects, the relevant government departments will give priority to approval, prioritize budgetary funds, and provide support in the form of interest subsidies, subsidies, and capital injections.
Zhang Fuqin, director of the China Petroleum Planning Institute’s Institute of Refining and Chemicals, said that the localization of large-scale petrochemical equipment is imperative, and the government must issue preferential policies to encourage users to use domestic equipment. Judging from the current situation, China can basically synchronize with the world's oil refining production technology. Advanced production processes are already mastered domestically, and some are even better than foreign ones. The required equipment can be designed and manufactured on its own. However, the large-scale ethylene plant has made it difficult to localize key equipment. Zhang Fuqin pointed out that in order to speed up the process of localization and industrialization of large-scale ethylene equipment, enterprises must intensify technological innovation and achieve key breakthroughs and developments in key technologies and equipment.
Domestic equipment market averages 75 billion yuan annually
Large-scale petrochemical equipment is one of the 16 major technical equipments identified by the country as a key development. According to the discussion paper, during the "11th Five-Year Plan" period, the goal of localization of petrochemical equipment will reach 75%.
It is understood that it is at this stage that the demand for domestic petrochemical equipment is the most vigorous. The scale of newly built refineries in China will basically reach 8 million to 10 million tons, and the new ethylene projects will reach 800,000 to 1 million tons. Relevant experts stated that according to this goal, China’s equipment manufacturing industry will have a market of 75 billion yuan in the total demand for equipment in the petrochemical industry in the country each year.
In view of the fact that China’s large-scale petrochemical projects basically introduce advanced foreign technology and domestic equipment is difficult to participate in bidding, the discussion paper proposes that the localization of large-scale petrochemical equipment should be seized from the source and from the tendering process, and that the petrochemical enterprises should submit equipment when new projects are required. The list, in which equipment that has been domestically capable and has been promoted for use in China, will be banned from import. For those that have domestic production capabilities but have not yet been promoted, the government will restrict imports through taxation policies.
The non-imported equipment proposed in the discussion draft includes: 800,000 to 2 million tons of hydrocracking reactors, 700,000 tons of cracked gas compressors, and 300,000 tons of propylene compressors. The 1 million tons of cracked gas compressors and propylene compressors, 600,000 tons of PTA air compressors and other equipment are listed as restricted imports.
Give priority to supporting national key projects
Dr. Zhang Xiaofeng, deputy general manager of Beijing Inoweisen Science and Technology Co., Ltd., engaged in large-scale petrochemical engineering technology contracting, believes that at present, the design and manufacturing capabilities of China's petrochemical equipment manufacturing industry have reached a considerable scale and technological level, and most petrochemical equipment can be designed and manufactured on their own. Some equipment has reached the international advanced level. The localization rate of oil refining equipment has reached more than 90%; the local production rate of ethylene equipment with an annual output of 300,000 tons has reached more than 80%; some equipment of PTA equipment has also achieved localization. This has, to a large extent, changed the situation in which China's petrochemical plant equipment has long depended on imports. The one million-ton ethylene core equipment also achieved breakthroughs and began to be applied. There is no need to repeat the introduction.
Maoming Petrochemical has an annual output of 1 million tons ethylene ethylene cracker compressors, cold boxes and other key equipment, a total of 510 equipment in 448 Taiwan is domestic manufacturing, localization rate of 87.8%, the first use of domestic technology and equipment localization of the highest recording. The operation of the Shenyang Blower Plant for Maoming Petrochemical with a single-phase capacity of 640,000 tons/year of cracking gas compressors shows that the unit performance has reached the international advanced level, ending the passive situation in which million-million-ton ethylene cracked gas compressors must rely on imports.
The discussion paper also clarified that it is necessary to rely on key projects to promote the localization of major technology and equipment. At present, the state's key projects are Zhenhai, Tianjin, and Fushun's one million-ton large-scale ethylene projects. For these projects, the relevant government departments will give priority to approval, prioritize budgetary funds, and provide support in the form of interest subsidies, subsidies, and capital injections.
Zhang Fuqin, director of the China Petroleum Planning Institute’s Institute of Refining and Chemicals, said that the localization of large-scale petrochemical equipment is imperative, and the government must issue preferential policies to encourage users to use domestic equipment. Judging from the current situation, China can basically synchronize with the world's oil refining production technology. Advanced production processes are already mastered domestically, and some are even better than foreign ones. The required equipment can be designed and manufactured on its own. However, the large-scale ethylene plant has made it difficult to localize key equipment. Zhang Fuqin pointed out that in order to speed up the process of localization and industrialization of large-scale ethylene equipment, enterprises must intensify technological innovation and achieve key breakthroughs and developments in key technologies and equipment.
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