Peiyang Chemical Equipment Co., Ltd.
The Suggestions for the Developing Directions of Independent Refiners

Their development has encountered bottlenecks, including decentralized capacity and weak competitive edge of product's structure. The government will plan to do in the future:“to support a batch of enterprises, transform and eliminate a batch of them", and" the enterprise will be toward the directions of "unified planning, unified supply and marketing, unified logistics".

1. To fully develop the role of petroleum purchasing alliance to reduce the purchasing cost of crude oil;

2. To integrate production and marketing, and vigorously develop the terminal market; to have coordination of marketing and marketing means of science and technology;

3. To make the products different and professional;

4. To intensify and cluster the development of downstream industry;

5. To coordinate the logistics organizations;

6. To make the development of enterprises become large—scale.

1. To cut down the purchasing cost through deepening the cooperation in alliance.

The cost of purchasing the crude oil takes up 90% of total cost of enterprise operation, and the cost decides its operating efficiency. The Chinese purchasing alliance for oil of independent refiners set up in February in 2016.

Members of the Alliance (Dongming petrochemical, petrochemical, chemical, HSBC Celestica, Lu Qing Petrochemical Yatong qirain chemical, petrochemical, petrochemical, sea right source group, Hengyuan petrochemical fuel, Jincheng, Xinyue petrochemical, chemical, chemical, CNOOC shechi Landbridge petrochemical, Xinhai petrochemical, petrochemical, Bao Feng Li, Qi Cheng Petrochemical tower petrochemical, Hebei Xinhai, Shouguang alliance)

On the basis of Dongming Petrochemical subsidiary of Singapore Pacific business holding company as the centralized procurement of imported crude oil platform, purchasing alliance enhances bargaining power, reduces adverse competition and declines the cost in order to safeguard the interests of the industry. There are 20 enterprises joining the alliance for the time being. The first batch of units have refining capacity of 75 million tons, and the estimated amount of access to crude oil imports is in 65 million tons.

2. The terminal layout, coordination and the sale means with scientific and technological renovation of selling the finished products

1.We will vigorously develop retail terminals such as gas stations to increase retail sales, and prevent the oil retail companies from continuing to "shear" wool". Dongming Petrochemical currently has nearly 200, while Jing Bo and Axiata have more than 100 respectively.

2. Shandong local independent refining enterprises set up "D20" for the sale of finished oil products, organized 20 local refineries to hold monthly pricing meetings, and jointly adjusted the purchase price of refined oil products from the two companies. Moreover, it has achieved good results.

3. Dongming, Jing Bo, Changyi, China Star and other enterprises’ "electricity supplier" have become a new bright spot sales. The direct sales from Dongming petrochemical terminal to the gas station accounted for 86%.

3. It brings into play its strong points. And the products are different and professional. It integrates all the chemical projects.

The development of independent refiners has encountered bottlenecks, including decentralized capacity and weak competitive edge of product’s structure. They should make full use of their device characteristics and advantages to follow the line with differentiation, specialization and industrialization. They should have the developmental pattern integrating industries from downstream and upstream.

4. To unify planning to transfer into industrialization and intensive cooperation. And to take a road of deep processing.

The integrated refining and chemical industry cluster can effectively integrate resources AND reduce logistics, capital, environmental protection and other costs through rational planning, improving the competitiveness and added value of products.

5. The unified scheduling and cooperation of logistics organization

1. To organize all the international shipping to dispatch uniformly, reducing the shipping charge and arranging them to arrive at the port orderly;

2. To exchange the information among port and wharf and to dispatch uniformly, raising their efficiency;

3. To strengthen the public use of pipes and increase their utilization;

4. To enlarge the logistics facilities such as warehouse to enhance the storage capacity.

5. To strengthen the transportation of dangerous chemicals to improve the defibering capacity.

6. The large-scale development and collectivization of refining and chemical enterprises

The collectivization of refining and chemical enterprises is the trend in the future. The independent enterprises are becoming the large—scale group through merging gradually. There is going to form about 10 super—massive refining and chemical enterprises.


The capacity of oil refining(million tons)

Annual processing capacity of major oil companies

(million tons)

Proportion of major refineries to total refining capacity

The United States 90485 Valero (9300), marathon, Chevron, Exxon Mobil, Phillips, 70% of top ten Oil Refinery Co

British 6949 BP, Shell, Total, Mobil Exxon, ConocoPhillips   93%

Korea 14795 SK energy (4200), S-oil (3345), GS (3925) 77.53%

Japan 19583.5 JX East Gas (10841),Chu Guang, Showa Shell (5739) 84.66%

Singapore, 6722.5 Exxon Mobil (2962.5), Shell, Wu Gong Island (2310), Singapore Petroleum Corporation (1450), 95.98%

Taiwan 5200 in Taiwan (2500), Formosa (2700) 100%

They deepen cooperation through alliance or merger and reorganization, and hold together to keep warm

When strengthening the trade union, they should promote the local refiners to deepen cooperation by merging, reorganizing, exchanging the stock right and building up the refining groups at the same time. To optimize the integration of local refining enterprises in raw materials, logistics, capital, products and other aspects of the configuration. And to achieve large capital and large logistics as well as improve the core competitiveness and discourse power of the industry.