Bo Wen Bo Shi | Show You the Past and Present Lives of Shandong Dilian

Compared to the main refineries, ground refining originated from the macro adjustment of China's petroleum and petrochemical industry in 1998. In 1998, the government carried out structural adjustments to the petroleum industry, with the restructuring of the business of two major companies, PetroChina and Sinopec, and the differentiated closure and conversion of small refineries. After the rectification, most refineries with a processing capacity of over 1 million tons/year were transferred to the two major state-owned oil companies, while small refining enterprises with a processing capacity of less than 1 million tons/year chose to retain 82, becoming local refineries; The asphalt plant, solvent oil plant, and lubricating oil plant are managed by local governments; The rest will be closed.

With the transformation of China's economic system from a planned economy to a market-oriented economy, the raw material supply pattern of Shandong Refinery has undergone significant changes. The main processing raw materials have gone through three main stages: domestic crude oil, imported fuel oil, and imported crude oil. At present, the raw material supply of Shandong Refinery has formed a pattern of mainly imported crude oil and supplemented by domestic crude oil.

Phase 1: From the 1970s to the 1990s, crude oil, as an important strategic material for the country, has always been under national control. At this stage, the raw materials processed by Shandong Refinery mainly include oilfield landing oil, bulk well oil, and the national approved Shengli crude oil indicator oil, of which the quota of Shengli crude oil indicator oil is less than 2 million tons. As of the end of 1997, the national crude oil processing capacity was approximately 229 million tons per year, of which 13.08 million tons per year were produced by ground refining, accounting for 5.7% of the total crude oil processing capacity in the country. The total annual raw material processing capacity was approximately 10 million tons.

Phase 2: From 2000 to 2014, imported fuel oil will be used as the main processing raw material. With the expansion of local refining capacity, domestic target crude oil is difficult to meet the production demand, and Shandong local refining urgently needs other sources of raw materials. After China's accession to the World Trade Organization (WTO), the state-owned trade import of refined oil products (including fuel oil, gasoline, aviation kerosene, diesel, naphtha, and wax oil) was abolished from quota management in 2004 and changed to automatic licensing management. Straight-run fuel oil became the main raw material for local refining. The quality of imported fuel oil is poor, the API gravity is generally 10~20, and the sulfur content is high. It is a heavy raw material that large refineries at home and abroad "disdain" to process. In the face of a shortage of raw material supply, imported fuel oil has become the main raw material for Shandong Refinery, and has promoted the rapid expansion of production capacity in secondary catalytic and coking processing units.

Phase 3: After 2015, imported crude oil will be the main processing raw material. With the promotion of China's market-oriented reform of oil and gas, in February 2015, the National Development and Reform Commission issued a notice on issues related to the use and management of imported crude oil, which gradually became an important processing raw material for local refining. As of April 2017, a total of 23 refineries in China have obtained the right to use imported crude oil, with a total usage quota of 95.85 million tons per year. Among them, 18 refineries in Shandong have obtained the right to use imported crude oil, with a total usage quota of 60.85 million tons per year.