Kuwait Oil Minister Sheik Ahmad Abdullah Al Sabah arrived here Monday, with his talks with Chinese government and company officials expected to focus on a planned joint venture refinery and petrochemicals complex, sources involved with the visit said.
Kuwait Oil Minister Sheik Ahmad Abdullah Al Sabah arrived here Monday,
with his talks with Chinese government and company officials expected to focus
on a planned joint venture refinery and petrochemicals complex, sources
involved with the visit said.
The project, which will cost around $9 billion, has been under negotiation now
for more than five years, but it isn't yet clear whether the present trip will
result in a final go-ahead.
The 300,000-barrel-a-day refinery project now requires only formal Chinese
government approval for construction to start, as a last procedural barrier, an
environmental impact study, had now been approved, one source said.
Sheik Ahmad and officials from Kuwait Petroleum Corp. or KPC, and Kuwait
Petroleum International, or KPI, will meet with Chinese Vice Premier Li
Keqiang. The trip, which follows previous visits to
China
in
April and May 2009, aims at reiterating
Kuwait
's
"strong support" for a planned joint refinery and petrochemical
project in southern
China
,
which awaits final Chinese government approval,
Kuwait
's
official Kuna news agency reported Monday.
If approved the complex is expected to come onstream as early as 2013 and will
be the largest Sino-foreign joint venture in
China
energy sector, Kuna added.
The Kuwaiti minister is also scheduled later this week to fly to
Guangdong
Province
,
where the plant will be located, to discuss the project with local provincial
leaders, according to Kuna.
Apart from the Kuwait project, Chinese companies are negotiating at least four
other joint venture refinery projects, at a time the country's refining sector
is straining at the seams to produce enough refined oil to meet domestic
demand.
The
Kuwait
refinery, for which the Gulf state will supply all the crude, is a 50-50 joint
venture between China Petroleum & Chemical Corp. (SNP), known as Sinopec,
and Kuwait Petroleum Corp. Sinopec is
China
's,
and
Asia
's biggest refiner in terms of capacity.
The project also involves building facilities capable of producing 1 million
tons a year of ethylene.
In May, economic planning watchdog the National Development and Reform
Commission gave its provisional green light to the complex, to be built in
Zhanjiang
city
in southern
China
's
Guangdong
province. Final approval was dependent on it getting environmental approval,
and then the Chinese government's formal go-ahead.
The project was delayed in 2009 when the original site for the refinery, at the
more heavily populated Nansha district in
Guangdong
, was
rejected on environmental grounds.
The plan suffered another setback in December, when Royal Dutch Shell PLC
(RDSA.LN) said it had ended talks to take a stake in the project, opening the
way for other international oil companies to join.
It isn't clear if
Kuwait
still
intends to bring in foreign partners.
Kuwait Petroleum International, which oversees KPC's international downstream
marketing operations and represents
Kuwait
in
talks with potential partners, has said it would finalize any international
partnership only after the Chinese government grants final approval for the
project.
China
's two
main refiners, Sinopec and China National Petroleum Corp., which together have
more than 4.5 million barrels a day of processing capacity in
China
, plan
to boost crude oil processing to record highs in November to help deal with
diesel shortages in several parts of the country.
In line with efforts to bolster the sector, seven weeks ago China National
Petroleum Corp., or CNPC, and
Russia
's OAO
Rosneft (ROSN.RS) agreed to invest around $5 billion in a 260,000-barrel-a-day
joint venture oil refinery in the Chinese city of
Tianjin
, with
this supplied with crude from
Russia
and
elsewhere.
Three other projects with foreign companies are on the drawing board. One
involves CNPC and Petroleos de Venezuela SA, or PDVSA project in
Southern
China
, while another is for a refinery to be built near
Shanghai
by
Qatar Petroleum International and CNPC unit PetroChina (PTR).
Also, in September,
South Korea
's SK
Energy Co. (096770.SE) said it was talking to Cnooc Ltd. (0883.HK) about a plan
to build a refinery in north eastern
China
.
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