Introduction to the

 Qilu Chemical Industry Park

Qilu Chemical Industry Park (QCIP) is an important cooperative project belonging to the China Petrochemical Group and Shandong provincial Government. It is a large chemical industrial park, which is shared and developed directly by China Petrochemical Group. It was the third chemical industry park to be created in China, after those in Nanjing and Shanghai.

QCIP is in the district of Linzi, in Zibo City, Shandong. The territory belonging to QCIP comprises 96km2. The park is being developed in two stages. In the current term, the construction area is 42.11km2. Qilu Petrochemical Corporation and the other existing companies occupy 22km2 of this and the area to be developed will be 20.11km2. QCIP is divided into 5 functional sections. These are the oil refining section, the ethylene complex, the Eastman petrochemical project section, the fine chemicals section, and the plastic processing (export production) and tech.& trade section, producing petrochemical plastic products.

QCIP has significant productive capabilities. We will combine the petrochemical industry, chlor-alkali industry and coal chemical industry together in proper principle and develop them well, based on the feedstock advantage from Qilu Petrochemical Corporation. We will develop the basics of down stream processing and form the integration of both up and down stream products. The primary endeavors of QCIP are coal gasification, C1 chemical production, a series of propylene products, a series of aromatics, a series of high molecular materials and a fine chemical industry. All of these will rely upon the lead of a productive complex of ethylene/petrochemical and chlor-alkali chemical industries and refineries. 3 chemical industries in 1 is characteristic of chemical industrial zones in China.

The following statement is the overall development goal of QCIP. We insist on an export-oriented economy, an advanced starting point, and superior technology for maximum benefit, and we will concentrate our energy on drawing into the investment, state-of-the-art technology and expert administration. Our focus will be on funding, policy and expertise. With 10 to 15 years of hard work, we will make QCIP a chemical industry park of advanced technology, complete installations, and perfect functions, and it will be environmentally friendly. We will strive to become known and respected globally and first-rate in China. During China’s tenth “five year plan”, we will endeavor to bring in more than 20 billion RMB in investment capitol and increase industrial output value by more than 30 billion RMB.

The new development and construction plan of QCIP will be completed in two stages. The first stage (2002 to 2010) is 8 km2, the second stage (2011 to 2020) is 12km2. The current major industries with QCIP are the Eastman Petrochemical Project Section and Plastic Processing (export processing) Section. In order to build a foundation of fine chemical and plastic processing in China, the Eastman Petrochemical Project Section will rely on its Qilu-Eastman joint venture to develop plasticizer and the intensive, finely processed products of propylene, coal gas and acetic anhydride, etc. The Plastic Processing Section will rely on the advantage of raw materials produced by Qilu Petrochemical Corp. to develop all types of plastic processing products, including plastic PVC profiles and pipe materials. This section will also develop an export processing section to build its chemical plastic production technology trade.

QCIP has a solid foundation and excellent conditions for industrial production formed by the existence of complete public works, key elements of the infrastructure and highly qualified technological personnel. Currently the Park has the processing capacity of 10,000,000 tpa of oil refining, 500,000 tpa of ethylene, 650,000 tpa of synthetic resin production, and 150,000 tpa of synthetic rubber production. It can also produce more than 300 different kinds of petrochemical industrial products. Most importantly, it has established a more solid industrial foundation with the addition of 720,000 tpa of ethylene. There are three power plants with an overall capacity of 1MKV and they are able to guarantee the provision of sufficient power and steam. The water supply comes from the Huanghe River and with the groundwater, the complete requirements of the Park can be filled. There is a large sewage treatment plant with an overall capacity of 70,000 t/d, and a high-capacity discharge pipeline to the ocean. All chemical gases such as CI2, H2, N2, O2, can be produced within QCIP. Within the park, Qilu Petrochemical Corp. has a special oil pipeline to Huangdao seaport in Qingdao, and special pipelines for petroleum and natural gas to Shengli Oil Field in Dongying. Zibo is the intersecting point between the railway and the Shandong provincial highway and an important transportation hub. Jiaoji railway and Xintai railway are easily accessible from the Park. Dongfeng/Tieshi Railway Marshalling Yards and several special railways are in the park. Jiqing Expressway, 309 National Highway and 205 National Highway are very close to the park. The storage & transportation capacity is as much as 30MT/a of chemical raw materials and products. At present, QCIP has more than 100,000 staff in chemical works and many professionals who are experts in technology, administration and management. It is advantageous for the park to reduce costs, enlarge business and investment, strengthen the communication and cooperation with international groups and companies, and to promote the acquisition of industrial property.

QCIP enjoys the incentive policies of our nation’s new and high technological development zone. In order to support the development and construction of QCIP, from the year 2003, the municipal government of Zibo city and Linzi district will collect none of the new increased local taxes for five years. All the money will be used as the development foundation for the park. It will be predominantly used for parts of the infrastructure, the construction of public works and to support the growth of business and investment. In order to bring in more investors all over the world to set up operations in our park, we will provide the most incentive policies, the best environment and the best services.