Economic Trend News
- Nansha refinery project wins nod
Date: 6-Dec-2007 Sources: (Shenzhen Daily)
THE government has approved plans by domestic and Kuwaiti oil firms to build a US$5 billion refinery and chemicals project in Guangdong, domestic oil refiner Sinopec said yesterday.
The National Development and Reform Commission approved 'initial work?on the project in Nansha, which is at the mouth of the Pearl River, northwest of Hong Kong, Sinopec said in a notice on the Web site of its parent company, China Petroleum & Chemical Corp.
Approval of the project, the biggest joint investment in China ever, follows feasibility studies by China Petroleum & Chemical Corp., or Sinopec, and Kuwait Petroleum.
China and Kuwait signed a memorandum of understanding on the project in late 2005, with an agreement to use Kuwaiti oil at the refinery. At the time, the Chinese partner was reported to be China National Petroleum Corp., but that later changed to Sinopec, Asia's biggest refiner by capacity.
The project reportedly is slated to begin operations in 2010.
Earlier reports said the total investment for the project would be about US$5 billion, compared to the US$4.3 billion being spent by Royal Dutch Shell and Chinese offshore oil giant CNOOC in a petrochemical plant at Huizhou, also in Guangdong.
Another joint venture involving ExxonMobil Corp., Saudi Aramco and Sinopec will expand a petrochemical refinery at Quanzhou, in neighboring Fujian Province.
The refinery projects are intended to help relieve chronic shortages of oil products in the booming manufacturing region.
Kuwait, which has the world's fourth-largest oil reserves, has been moving to expand its sales to China. China's crude oil imports from Kuwait surged 49 percent in January-October from the same period last year to 3.28 million tons.
China, the world's fastest-growing major economy, wants to increase oil-processing capacity by 25 percent by 2010 to meet rising consumption of fuels and petrochemicals.
'It's Sinopec's ambition to strengthen its play in the southern China market, where energy demand growth is always massively outpacing supply,'' Qiu Xiaofeng, an oil analyst with China Merchants Securities Co., said.
The Nansha plant will be able to process 12 million metric tons of crude oil a year and the ethylene unit will have an annual capacity of between 800,000 tons and 1 million tons, Wang Tianpu, president of Sinopec, said in August this year.
The provincial government of Guangdong, the nation's manufacturing hub, wants to develop the province into a major petrochemical production center for Asia.
Guangdong consumes 8 percent of the nation's total energy demand and 18 percent of total fuel demand in 2005.
Sinopec will halt expansion work on the ethylene unit at its Guangzhou refinery, close to the Nansha complex. The existing 200,000 ton-a-year ethylene unit will be closed after the Nansha plant starts operation, it said in a statement Tuesday.
Sponsor Results:
