Yantai crude line delivers big change

A crude oil pipeline with an annual transmission capacity of 20 million tons was put into operation on Monday in East China's Shandong province.

It is the first pipeline of such scale to start operations during the 14th Five-Year-Plan period (2021-25) in China.

Originating at Yantai Port of Shandong province, the pipeline, with a length of more than 370 kilometers, is also the first public crude oil transmission line to link the port directly to the oil refineries.

Capable of heating and insulation, the pipeline further facilitates the unloading, storage and transmission of oil products with higher efficiency and less oil losses during the transport process, Yantai Port executives said.

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said the crude transmission pipeline will drastically reduce logistics costs for companies while lowering road transport carbon emissions.

The project will also ensure a steady flow of surface transport, which in turn will secure a stable seaborne crude oil import supply chain, Luo said.

"Compared with other means, pipeline transmission is a relatively more stable and secure way of transporting crude at a lower cost," he said.

"The pipeline will substantially lift the energy supply capacity of Yantai Port while being the demonstration integrated project for crude import, transmission and refinery in coastal regions."

China has been stepping up infrastructure construction to boost both domestic demand and economic growth in recent years. As major infrastructure to ensure oil and gas supply, pipelines play a significant role in ensuring domestic energy security.

Li Ziyue, an analyst with BloombergNEF, said earlier that more pipelines need to be built, including natural gas pipelines, to satisfy an ever-growing appetite for gas across the country.

Invested by Yantai Port of Shandong Port Group, the crude oil pipeline took 17 months to finish after overcoming numerous geological obstacles and impact of the COVID-19 pandemic.

Along with a 315-kilometer major insulation pipeline and several branches, the crude transmission capacity of Yantai Port will be lifted to 40 million tons per year from the previous 20 million tons, which will further enhance the crude transmission capacity in East China.