CHINA has approved Sinopec Corp's US$5 billion joint venture oil refinery and petrochemical project with Kuwait Petroleum Corp in the southern Guangdong Province, a company newsletter said yesterday.
The project will have annual ethylene capacity of one million tons, according to a brief statement carried by the online Sinopecnews. Ethylene is a basic petrochemical building block.
The statement didn't specify the size of the refinery. Sinopec officials said earlier the plant would process 12 million tons of crude oil from Kuwait per year and expected it to come on stream in 2010.
China's top industry planner, the National Development and Reform Commission, has approved the project, it added.
Accordingly, Sinopec will stop an 800,000-ton-a-year ethylene expansion project in its Guangzhou unit, near the proposed Nansha plant. The existing 200,000-ton-a-year ethylene cracker at the Guangzhou unit will be closed when the new project starts, it said.
Sinopec said earlier that the Nansha project would need investment of US$5 billion, making it one of the largest joint venture petrochemical projects in China. Royal Dutch Shell Plc and China National Offshore Oil Corp started in 2005 a US$4.3 billion project in nearby Nanhai, also in Guangdong, a key manufacturing hub. And in March, Sinopec also agreed to a refinery-petrochemical-petrol-station project with Exxon Mobil Corp and Saudi Aramco involving total investment of US$5 billion in Fujian Province.
Shareholding structure in the Nansha venture hasn't been decided, a Sinopec spokesman said. Anglo-Dutch firm Shell and Dow Chemical Co of the United States had been in talks to take a stake in the venture.
Separately, China National Petroleum Corp has signed an agreement with Yunnan Province government to build a major oil refining project in the southwestern province. CNPC will build a refinery with annual capacity of 10 million tons and a one-million-ton-a-year ethylene plant to help ease fuel shortages there, in an area which has no major refineries at present, according to Xinhua news agency.