Private petrochemical giant Rongsheng Petrochemical’s first batch of 10 VLCC orders is about to be finalized. Two shipyards under China State Shipbuilding Corporation will share this large VLCC order worth 5.5 billion yuan.
According to trade wind news, as the first batch of orders for Rongsheng Petrochemical’s 30 VLCC construction projects, CSSC Leasing will soon place orders between DSIC and Waigaoqiao Two shipyards have placed orders to build up to 10 VLCCs. Each shipyard has received orders for 2+3 VLCCs, with delivery planned to begin in 2022. The new ships use conventional power. Based on the current price of approximately US$85 million per VLCC, the total value of this order will reach US$850 million (approximately RMB 5.554 billion).
As a private chemical fiber giant, Zhejiang Rongsheng Holding Group signed a strategic cooperation framework agreement and a joint venture cooperation agreement with China State Shipbuilding Corporation in early November. A joint venture will be established by CSSC and Rongsheng Trading Company to invest in the construction of VLCC. .
According to the agreement, the two parties will carry out joint venture cooperation in the new business of crude oil transportation. China Ship Leasing will rely on the strong scientific research and manufacturing capabilities of China State Shipbuilding Corporation, give full play to the unique advantages of the shipyard leasing company, and jointly build it with Rongsheng Group A new cooperation model for the upstream and downstream of the industrial chain, jointly establishing a joint venture to order VLCC in batches, and building a large-scale VLCC fleet to provide a stable, efficient and reliable supply chain for Rongsheng Group to accelerate the completion and commissioning of the Zhejiang Petrochemical Project, and fully guarantee National energy security, continuously consolidate and enhance the world’s leading position of China State Shipbuilding Corporation in VLCC construction, and provide strong support for China State Shipbuilding Corporation to comprehensively build a world-class shipping group.
According to International Ship Network, Rongsheng Petrochemical plans to build a fleet of very large tankers to transport crude oil from the Middle East to its Zhoushan green petrochemical base in Ningbo. Considering that Zhoushan Green Petrochemical Base will build three 20 million tons/year integrated refining and chemical projects, Rongsheng Petrochemical will need about 30 VLCCs to transport crude oil imported from the Middle East after all are put into production.
It is understood that Rongsheng Petrochemical was founded in 1989 and is a leading enterprise in the domestic chemical fiber industry. It implements the “vertical and horizontal” two-way development strategy and continuously extends the industrial chain upstream and downstream. Currently, Zhejiang Petrochemical Co., Ltd., 51% controlled by Rongsheng Petrochemical, is building a 40 million tons/year integrated refining and chemical project at the Yushan Island green petrochemical base in Zhoushan, Zhejiang. The project is expected to have a total investment of 173 billion yuan, making it the largest single industry project in the world and the largest investment project by a private enterprise in China.
According to the plan, the project will be built in two phases with two sets of 20 million tons/year crude oil processing, 1.4 million tons/year ethylene and 5.2 million Ton/year aromatic hydrocarbon integrated refining and chemical unit. The first phase, with a total investment of US$90.15 billion, has been put into production in 2019, and profitability has gradually emerged; the second phase of the project has now entered the on-site implementation stage, and is planned to start trial operation in the fourth quarter of 2020.
After all operations are put into operation, it will have a total production capacity of 40 million tons/year of crude oil processing, 2.8 million tons/year of ethylene and 10.4 million tons/year of aromatics, making it the fifth largest refinery in the world. In addition, Ningbo Zhoushan Petrochemical Base also has a third-phase 20 million tons refining and chemical integration project under planning. Once the third phase of the project is completed, the company’s annual petrochemical product output will reach 60 million tons.
It is reported that Rongsheng Petrochemical achieved operating income of 50.28 billion yuan in the first half of the year, a year-on-year increase of 27.3%, and achieved net profit attributable to the parent company of 3.21 billion yuan, a year-on-year increase of 206.6%. According to agency expectations, Rongsheng Petrochemical’s performance in 2020 is expected to reach 7 billion yuan.
Rongsheng Petrochemical said that the company’s year-on-year performance growth has been significant, mainly due to the 40 million tons refining and chemical integration project of its holding subsidiary Zhejiang Petrochemical Co., Ltd. . The commissioning of this project will, on the one hand, help the company build an integrated industrial chain of “crude oil – aromatics (PX), olefins – PTA, MEG – polyester – spinning – texturing”, achieve high-quality and efficient large-scale production, and reduce costs. Product costs will further enhance the company’s profitability, improve the company’s overall strength and risk resistance, and achieve leapfrog development; on the other hand, it will improve my country’s voice in the aromatics and ethylene industry to a certain extent, and drive the development of mid- and downstream chemical products. production, processing and sales to achieve the company’s economic and social benefits.
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