China approves $9bn Sinopec-Kuwait project
China’s top economic planning body, the National Development & Reform Commission granted final approval for the $9 billion refinery,petrochemical joint venture between Sinopec and Kuwait, two
The venture, including a 300,000 barrel-per-day refinery and a 1 million ton-per-year ethylene complex, would make Kuwait the second OPEC nation after Saudi Arabia to have a major refining presence in the world’s fastest growing major oil market.
The project, to be built in the southern coastal city of Zhanjiang and potentially one of the country’s largest foreign investments, would be 50-50 owned by Sinopec Group, parent of top Asian refiner Sinopec Corp.
But Kuwait is likely to hunt for a second or a third foreign partner for joint funding, industry officials have said.
“NDRC gave the approval last week,” said one industry official with direct knowledge of the government’s decision, adding that the announcement should be imminent.
China, the world’s second-largest oil user after the United States, has been boosting construction in its refining sector over the last two decades to feed a robust economy now the world’s second-largest.
But the industry, long dominated by oil duopoly PetroChina and Sinopec, increasingly favors expanding the business on its own, leaving scope only for partners equipped with resources such as OPEC exporters Kuwait and Venezuela.
Sinopec officials were not immediately available for comment. Kuwait Petroleum International’s Beijing representative office also declined to comment.
Kuwait, the world’s seventh-largest crude exporter, aims to eventually export 500,000 bpd of crude to China, versus last year’s sales to China at just under 200,000 bpd.
The joint venture is one of the few greenfield refineries China plans to add in the five-year plan from 2011 to 2015.