The Chinese government recently granted final approval for a joint venture project between Kuwait Petroleum Corporation (KPC) and China Petroleum and Chemical Corporation (Sinopec), one of the world’s largest refiners, to build a world-class refinery and petrochemical complex in south China.
This exciting project, estimated to be worth $9 billion, is the result of more than five years of negotiations and is China’s largest Sino-foreign joint venture.
KPC says that the joint venture represents a highly significant step forward in its plans to expand business in China, which is the world’s second largest consumer of petroleum products.
Located on Donghai Island, near Zhanjiang City in Guangdong Province, the new refinery is expected to be operational from 2014/15. It will process 100% Kuwaiti crude oil, supplied by KPC, with a refining capacity of 300,000 barrels per day, equivalent to 15 million tons per annum. In addition, the ethylene cracker unit will have an annual production capacity of one million tons. The fuel products will be marketed locally to meet the fast growing demand in Guangdong Province and across the rest of China.
Sinopec also recently announced it will form a joint venture with Saudi Aramco to build a 400,000 bpd refinery in Yanbu’, on the west coast of Saudi Arabia. This is expected to start operations in 2014. (Earlier post.)