Sinopec Shanghai Petrochemical is planning to upgrade its refining facilities this year to boost output by more than half as domestic demand for petrochemicals grows.
The revamp will enable China's biggest ethylene maker to produce 14 million tonnes a year, up from 8.8 million tonnes now.
Sinopec Shanghai Petrochemical company secretary Zhang Jingming said the expansion was aimed at bolstering upstream oil refining capacity to produce sufficient feedstock for downstream petrochemical production.
'We have plenty of downstream capacity but are lacking in upstream capacity,' he said.
The expansion, due for completion by the end of this year, centres on an investment of 387.6 million yuan to revamp the company's No1 vacuum and atmospheric distillation plant, raising its output capacity to an annual eight million tonnes, from 2.8 million tonnes.
Last month, the company's parent - and Asia's largest refiner - China Petroleum & Chemical Corp (Sinopec), said it was expecting a 5 per cent rise in the consumption of refined oil such as diesel and petrol this year and an 8.6 per cent rise in ethylene consumption. Such rosy forecasts boosted Hong Kong-listed shares of Sinopec's Shanghai Petrochemical to a year high of $3.45 on Wednesday after a gain of 192 per cent over the year.
