Dongshan Province, Dongying District
Accompanied by leaders from the Dongshan Provincial Development and Reform Commission, Shengli Oil Administration, and relevant departments of Sinopec, Lin Sanqi came to the private oil refinery on the Bohai Sea: Tianhong Petrochemical Plant.
There were also a few people wearing administrative jackets who came with them. Section Chief Song was in the crowd with a serious look on his face.
Lin Sanqi glanced back and thought that this guy was quite frivolous in front of him, but he looked so dead in front of outsiders that it would scare people to death.
The several leaders in charge present did not dare to look at these people in administrative jackets, but instead enthusiastically surrounded Lin Sanqi.
Dai Huayan, deputy director of the Shengli Petroleum Administration Bureau, pointed to the refinery in front of him and said:
"Director Lin, this Tianhong Petrochemical is one of the famous refineries in our Dongshan area. At its peak, its annual output could reach 1.5 million tons. It is a relatively large refinery among local refineries."
Lin Sanqi thought that the output of 1.5 million tons was enough to surpass the entire country's finished oil output in 1964.
The refinery in front of us is just one of the local refineries, not to mention those large state-owned refineries.
Having experienced the poverty of the 1960s, Lin Sanqi felt more deeply the rapid development of the national economy.
So he puffed out his chest, feeling proud of himself, and nodded with a smile:
"Great, great, that's great! Our country's oil refining and petrochemical industry has finally caught up."
Director Dai smiled bitterly and said:
"Mr. Lin, what's good about that? We used to be short of oil, and it took a lot of effort to find it. But now things have changed, and there's an oversupply of refineries.
Look at the Tianhong Petrochemical Plant right in front of you. Isn't it quiet? They've actually stopped production. We're heartbroken to see such a successful company go bankrupt."
Lin Sanqi blinked, somewhat puzzled:
"Do we have a surplus of refined oil? Then why do we import so much oil every year? Shouldn't we import in a planned manner based on national demand? This is all wasting our country's precious foreign exchange."
Lin Sanqi knew that there was a serious oversupply of domestic steel production, but steel companies were still frantically importing large quantities of iron ore.
Foreign iron ore companies are frantically exporting iron ore and raising prices at the same time. It is impossible to say that there is no trickery involved.
The most likely possibility is collusion between internal and external parties, and that a little girl in Australia has trillions in savings.
Director Dai suddenly blushed and coughed a few times:
"Well, well, I can't explain this question. After all, the qualifications to import oil are only in the hands of a few companies. Let's, hehe..."
A piece of fat meat appeared in Lin Sanqi's mind. Anyone who touched it would have his hands covered in oil that could not be washed off.
Deputy Director Peng of the Development and Reform Commission, who was standing nearby, quickly changed the subject and said:
"The main reason is that the domestic new energy industry has developed too rapidly in recent years. For example, electric two-wheelers, three-wheelers, and a large number of electric vehicles have been produced, and these do not require refueling.
Behind this energy revolution is the fact that my country's refining capacity has exceeded 1 billion tons/year, having long surpassed the United States to become the world's number one, but the capacity utilization rate has fallen to around 70%, with a structural surplus of over 300 million tons.
In 2014, five national departments issued the "Special Action Plan for Energy Conservation and Carbon Reduction in the Refining Industry", strictly ordering that the crude oil processing capacity be reduced to less than 1 billion tons by the end of 2016, and that production capacity with energy efficiency below the benchmark value be eliminated.
This type of "outdated production capacity" accounts for as much as 15%. The policy also clearly requires the complete elimination of atmospheric and vacuum units with an annual capacity of less than 2 million tons, and promotes the concentration of production capacity in large enterprises through "reduction and replacement."
This sounded quite official, and Lin Sanqi understood it. All refineries with backward technology or low production capacity would be shut down across the board.
Then the refining industry was concentrated in the hands of a few large refineries.
Whether this policy of "state advances and private sector retreats" is good or bad is not something that a small businessman like Lin Sanqi can question.
But at least the country has seen this drawback and is making changes. It can no longer continue to import crude oil crazily and without planning.
Lin Sanqi looked at the small refinery in front of him and thought that he needed to adjust his thinking.
It turned out that he was planning to build a large-scale factory with an annual refining capacity of 10 million tons, and move it directly to Daqing in another time and space in one go.
Now it seems that I can build a few more factories and place them in oil fields across the country. This will also save a lot of transportation costs for refined oil, right?
The transportation conditions in the 1960s were not extremely poor, but at least they were a bottleneck that seriously restricted logistics and the economy.
"Leaders, are there many local refineries like Tianhong Petrochemical in Dongying, or Dongshan Province?"
Deputy Director Peng replied:
"A lot, quite a lot. Let me put it this way: basically all local refineries will be shut down, even those that are doing brisk business. This is a huge headache for us right now."
Lin Sanqi thought, if we can't cut it off in one size fits all, we can only cut off the state-owned enterprises, so we can only cut off the private enterprises.
Of course, the problems of backward equipment and serious pollution in local refineries are also objectively existing. If this knife doesn't cut it, who else can it cut?
Director Dai also smiled bitterly and said:
"We have many local oil refineries in Dongshan Province. As you can see, Director Lin, we have a Shengli Oilfield in Dongying. Our working areas are mainly distributed in 28 counties in eight cities, including Dongying and Binzhou.
There are currently 17 local refineries relying on our Shengli Oilfield. These are large-scale refineries, and those refineries with annual output below one million tons are not included.
Now that so many refineries are to be shut down at once, not only will the local economy, tax revenue, and employment of ordinary people be affected, but the financial industry will be the most affected.
These refineries often require investments of tens or even hundreds of billions of dollars, but not all of the money comes from the bosses. A considerable portion of the money is borrowed from banks.
Now, a number of local refineries are closing down or even going bankrupt because they owe so much money to the banks. If this problem isn't handled properly, it's going to cause a huge mess."
Lin Sanqi glanced at Section Chief Song, who raised his eyebrows at him.
It turns out that Shandong was so warmly welcoming to this dog capitalist. That's where the problem lies.
The elimination of these small refineries is inevitable because of the restrictions of national policies, which also eliminates the possibility of other takeovers.
Once the policy comes out, the country can no longer accommodate these polluting enterprises, and no province will approve them. Then the equipment in these land-based refinery factories will become a pile of garbage.
Now that Lin Sanqi, a "junk collector", has suddenly appeared, doesn't it just meet the needs of Dongshan Province in all aspects?
A group of people accompanied Lin Sanqi around the refinery.
The equipment in this refinery is absolutely an industrial monster. The tower equipment, heat exchangers, reactors, storage tanks, and chimneys are so tall that people feel very small when standing in front of them.
In addition, there are so many pipelines densely packed together that even though Lin Sanqi is an outsider, he knows the technological content of these refineries and the huge investment.
As Lin Sanqi walked, he asked the factory engineer next to him:
"Mr. Du, I see your refinery is quite old. Look at all the equipment. Let me give you an example. If I were to relocate your entire factory and then reassemble it elsewhere, do you think it would be difficult?"
Engineer Du laughed:
"Mr. Lin, actually, assembling the production line isn't that difficult. It's just a matter of patience and perseverance. We have a complete set of drawings. As long as the workers follow the drawings, there won't be any problems.
Another thing is that our production line equipment is semi-automated. Ahem, large refineries are all fully automatic. Ours is a little behind, but it also greatly reduces the difficulty in operation.
It’s nothing more than building the supporting power plant and additive plant, and the actual production process is still simple.”
Lin Sanqi breathed a sigh of relief. With his previous experience with the power plant, he knew that assembly would not be a problem.
As for the problem of replacing damaged spare parts in the future, after he transported various machine tools to the 1960s, this bottleneck was broken and any kind of parts could be produced.
"Engineer Du, take your Tianhong Refinery for example. Can these production lines produce aviation kerosene?"
Engineer Du smiled confidently:
"Any kind of oil can be produced. Aviation kerosene isn't some high-tech product. It was produced during World War II, so it's even easier in 2016."
Lin Sanqi had a clue in his mind:
"So if I want to buy your refinery, how much does it cost?"
When the money was mentioned, Deputy Director Peng and several other leaders' eyes lit up:
"Director Lin, Director Lin, you're just going to buy an oil refinery? We have 12 similar refineries in Dongshan Province right now. Hehe, why don't you go and take a look at them all?"
Lin Sanqi thought, what tricks can I see? I am not a professional.
What was in short supply there in the 1960s was refined oil, so we had to get cars, trains and planes running first.
Then consider downstream products, such as chemical fibers, fertilizers, tires, asphalt, etc. (End of this chapter)
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