Sinopec Shanghai plant project to reduce energy costs by 15pc

Sinopec Shanghai Petrochemical - one of China's largest integrated petrochemical makers - expects to slash about 15 per cent of its energy bill following the completion of an ethylene plant expansion last month, according to vice-president Rong Guangdao.

The expansion is a key part of the H share's phase-four capacity enhancement project, budgeted at 6.5 billion yuan (about HK$6.08 billion), expected to be completed 5 per cent to 10 per cent under budget by August.

The project is expected to boost the company's overall petrochemical production capacity by 20 per cent this year, and by 30 per cent next year.

The company has undergone a 22-month renovation on its ethylene plant to upgrade its annual production capacity from 400,000 tonnes to 700,000 tonnes.

Energy accounted for about 20 per cent of the firm's refining costs, executive director Zhang Jingming said.

A 15 per cent cut in its energy bill would cause a fall of about 3 per cent in refining costs.

The capacity enhancement scheme also included a new 200,000-tonne-a-year polypropylene plant and a new 250,000 tonne a year polyethylene plant, as well as the upgrading of its acrylic fibre plant from 30,000 tonnes to 66,000 tonnes a year.