Since the beginning of 2016, the international crude oil prices have varied in the range of $40-50 per barrel.  The increased price differences between petroleum products, chemical products and crude oil raises the gross profit of production month by month. With the low oil price, self-generated electricity, steam cost is reduced and the energy cost is reduced significantly.  Favored by the good market, the company as a whole has fully displayed their team work and initiatives and achieved the good performance by overcoming the difficulties such as the delayed start-up of the old plant after Turnaround and diesel sales constraint in January.

From January till now, the company has realized continuous profits. As of June, the annual profit target has been exceeded, and the month of June achieves the first flawless operation month in this year with no recordable accident and unplanned shutdown. The ethylene yield reached 33.15%, which achieved the highest in the recent 3 years. Since March, the oil loss control returned to normal, getting rid of the fluctuation caused by start-up and shutdown of the old refinery. From the second quarter, RCL returned to the level of excellence, and the figure of May even achieved 0.3%, becoming the best for a single month. 5 HSE indicators including TRIR remained at zero for three consecutive months.

At the beginning of the new year, with the difficult sales of oil products, we saw the diesel inventory remaining at high level, which affected the crude oil processing quantity and the optimal operation of the whole plant. During the period of January to June, 4.93 million tons of crude oil was processed, down by 11%, the gasoline production was reduced by 9% and the production for diesel was 36% comparing with the same period of last year. Meanwhile, the prices of chemical products were better, maintaining higher margin for chemical segment. It has become a big difficulty for the company to maintain the high-capacity operation of  chemical units such as SC and PX under the circumstance of diesel overcapacity and low-capacity operation of refining.

In spite of difficulties, the industrious, intelligent and courageous FREP employees have carried out the following efforts:

1.      We worked hard to develop the market for and increase the sale of jet fuel, which not only increases the profits and effectively alleviate the overcapacity of diesel production. The sale of jet fuel in the first half of 2016 was increased by 19% year on year.

2.      We optimized the fraction cut from the source starting with APS/VPS: fully implementing plan to produce more naphtha; optimizing diesel fraction; minimizing the output of diesel and increasing the output of hydrogen cracking feedstock such as LVGO.

3.      We optimized the operation of interim conversion unit: increasing HCU processing quantity, maximize the output of hydrocracking jet fuel; increasing the quality of hydrocracking diesel, providing high standard feedstock for SC unit; maximizing the output of hydrogen cracking heavy naphtha as the feedstock for Aromatics, to achieve the effect of “drawing inferences about other cases from one instance”. Diversify the feedstock for hydrogen cracking unit, heighten the capacity of catalyzing diesel, increase output of gasoline and lower diesel-gasoline ratio. The MHUG technical revamp not only cuts the output of diesel but also upgrade the quality of diesel as the feedstock for SC.

4.      We ensured the steady and safe operation of SC and Aromatics, with flawless operation occurring in the Aromatics for 18 consecutive months. We also work hard to develop the production and sale of new polyolefin brands, with new brand FL1802 of PE and 1107K of PP selling well in May. We kept optimizing the production and sale of the cracking C5 for industrial purposes and achieved good results. 

Faced with the difficulties and challenges in the second half of the year, people at all levels shall take action together because we are in the same boat and to achieve the benefit goal of the company is the first priority. We must stick to the optimal cut of naphtha, diesel, VGO in the key units to ensure the steady high-capacity operation and actively promote the technical revamp in diesel conversion.We are fully confident that we will make better performance in the second half of the year. (Fang Quanyu)