UPDATE 1-Sinopec, Kuwait in MOU for China Zhanjiang refinery

*MOU follows relocation to Zhanjiang in Aug

*Sinopec, Kuwait to officially start feasibility, EIA

*Expects Beijing's approval in Apr/May; yet to finalise foreign partners

BEIJING, Oct 26 - China's Sinopec Group and OPEC member Kuwait signed on Monday a preliminary pact to build a mega refinery and petrochemical complex in southern China's Zhanjiang city, an industry executive told Reuters.

The deal, inked also with local governments, marks another step forward for the planned $9 billion venture after Beijing's order to relocate the plant due to environmental concerns, allowing partners to officially kick off a feasibility and environmental impact assessment (EIA).

"The MOU is signed today, it's officialising the deal after picking Zhanjiang as the new site," said the official familiar with the investment.

The feasibility and EIA reports are expected to be completed by about March 2010 before being submitted to the government for approval.

"We are expecting to get that approval around April, May," the official added.

Kuwait has yet to finalise foreign partners for the project, likely one of the largest foreign investments in China, to be built in Zhanjiang, in the western part of China's export hub in Guangdong province.

The OPEC member last year shortlisted Royal Dutch Shell and Dow Chemical Co as potential refining and petrochemical partners, respectively.

But BP, which has long eyed the same site, Donghai island of Zhanjiang city, to build its first China refinery, has lately expressed interest in joining the refining part of the Sinopec-Kuwait project, said the official.

The project, a 300,000 barrel-per-day refinery and one million tonne-per-year ethylene complex that produces plastics, synthetic rubber and fibre, first picked Nansha, at the heart of densely populated Pearl River Delta.

But companies were forced to relocate the plant after strong opposition from environmentalists and residents, as well as neighbouring Hong Kong over potential pollution and damage to the wetland area where Nansha is located.