China’s ambition for the new year has become all too evident in recent months, with PetroChina announcing its plans to launch a new refinery with ethylene capacity in the new year. China has seen its focus in the energy industry shifting in recent months, as the nation aims to slow down diesel and fuel production in favor of a more diversified portfolio. The new Dalian hub will replace an older, more traditional refinery in the city, following the phased-out closure of the site amid calls from locals and a changing energy industry in China.
China’s shifting energy industry has led the nation down a new path
For many generations, the Chinese energy industry has operated on brute force, with refineries outpacing the standards of the rest of the world. However, as the world and indeed the energy market change to adapt to the new and pioneering technology requirements, China has opted to give the go-ahead for the new state-of-the-art facility to be constructed in the new year.
PetroChina is a state-owned company that represents the sentiment of the nation, with China’s energy industry seeing significant changes in the last few months and years. The old facility in Dalian was the jewel of the company’s portfolio, with an astonishing 410,000 bpd capacity. The older refinery has been slowly shutting down in stages since 2023.
Out with the old, in with the new, says PetroChina
The older refinery in downtown Dalian saw its last crude oil unit go offline in June, marking the end of an era in the Chinese energy market as the facility was one of the largest and most important in the nation. With many industry insiders pointing to mounting evidence that the Chinese demand for fuel has peaked, the closure was seen as necessary, opening the path for the new PetroChina refinery.
PetroChina has not given up on the prospect of leading the Chinese energy market
While the closure of the old refinery was seen as a necessity, PetroChina has not given up yet, as the company has announced that it has approved plans to build a new facility in Dalian. The all-new multibillion-dollar refinery will be paired with a petrochemical plant that produces ethylene among a litany of other products.
The new energy complex will be built on Changxing Island and will consist of a 200,000 bpd crude refinery and a 1.4 million ton-per-year ethylene unit. This approval comes as the Chinese energy market has shifted following the boom of the EV industry, leading to a decrease in fuel demand. The estimated total cost for the new complex is hovering around the $9.56 billion mark.
Industry analysts have noted the inevitable change in demand across the Chinese energy market
The approval of the new facility comes as no surprise to some in the market, as CNPC and IEA analysts have predicted that China’s high levels of consumption of diesel and other fuels have most likely hit a ceiling. This can be attributed to China’s surge in EVs, marking the nation as the top destination for the industry across the world. While other nations and companies plan to diversify their energy portfolio in the new year, PetroChina is aiming not to be left behind.
The revamp of the Dalian energy complex marks a new way forward in 2026
Out with the old, in with the new. The revamp of the Dalian complex marks a significant shift for the Chinese energy market as the industry evolves beyond the previous stance of oil production into a new petrochemical future. The new facility will, of course, still operate as a refinery for the crude oil sector, but features the latest technology as well as the ethylene unit. With the US stepping up its game in the new year as well, China is facing the new year with a renewed sense of optimism thanks to the new energy complex in Dalian.
