Sinopec, KPC to build refinery in Zhanjiang

Aug. 11, 2009 (China Knowledge) - Sinopec Group, the parent of Sinopec<600028><0386><SNP>, on Aug. 10 announced that one of its crude oil refining projects, to be jointly developed with Kuwait Petroleum Corp, will be located in Zhanjiang, Guangdong Province, sources reported.

The refining project, which will cost an estimated US$9 billion and will be put into operation at the end of 2013, will have a crude oil processing capacity of 15 million tons a year, a capacity equivalent to 300,000 barrels per day. The site will also be home to an ethylene complex that will produce 1 million tons of plastics and chemical fiber.

The two partners intend to start a feasibility study for the new site this week and will write up a report on environmental protection issues, said Sinopec Group.

As early as 2006, Sinopec Group and KPC had received approval from the National Development and Reform Commission to set up a refinery in Guangdong Province. The refinery, which was originally expected to cost US$5 billion and was to have a crude oil processing capacity of 12 million tons a year, was going to be built in Nansha. Construction there was blocked due to environmental concerns.

Reportedly, Sinopec Group on Aug. 10 signed agreements with China Shipping (Group) Co, Sinotrans Group, China Ocean Shipping (Group) Co and China Merchant Group to obtain transportation services on a long-term basis.