PetroChina and Sinopec, the nation's two leading oil firms, are awaiting
final government approval to jointly construct a US$1.6-billion refinery to
process Sudanese oil in Southwest China's Guangxi Zhuang Autonomous
Region.
PetroChina, which initially proposed the refining project in
Qinzhou, a port city of Guangxi, will have a 70-per-cent stake in the new plant,
with the remaining 30 per cent going to Sinopec, according to a PetroChina
official, who wished to remain anonymous.
The Guangxi project will be the
first time the rivals have come together to work on a joint project.
A
senior official at PetroChina's refining and marketing division confirmed the
partnership with Sinopec, but told China Daily yesterday that the two firms were
still awaiting the final nod from the National Development and Reform Commission
to proceed with the construction work.
"It is difficult to predict when
the government will approve the project," he said, without
elaborating.
Pan Wenfeng, a local government official in charge of
Guangxi's industrial projects, last month revealed that the Qinzhou refinery
would involve a total investment of 13 billion yuan (US$1.6 billion) and was
likely to win the NDRC's approval within four to six months. It satisfied the
government's environmental requirements in June.
Sinopec, which enjoys a
stronger marketing presence in the south than PetroChina, wanted to build a
separate 8-million-ton-per-annum refinery in Beihai, a port city 100 kilometres
from Qinzhou. Sinopec already operates a small refinery at Beihai with an annual
crude-processing capacity of 600,000 tons.
But amid concerns about
overlapping investments, the authorities ordered both companies to compromise on
a joint plant in Qinzhou, which has a designed capacity of 10 million tons a
year, a Sinopec official told China Daily.
The new refining facility in
Qinzhou will process oil from Sudan, where PetroChina's parent company produced
16.38 million tons of crude oil and found new reserves of 78.6 million tons last
year.
Expected to come online by 2010, the jointly invested refinery will
benefit from the huge market demand in southwestern China, as well as the
possibility of domestic oil product prices being brought closer to the
international level, analysts said.
