Asia's top refiner Sinopec is planning a new joint venture
refinery and petrochemical complex to consolidate its foothold in
South China.
"We are right on track, negotiating with overseas partners to
build a refinery and petrochemical complex in Guangdong Province.
Its processing capacity will be 12 million tons, while the
petrochemical plant will roll out 800,000 to 1 million tons of
ethylene (a year)," Sinopec President Wang Tianpu said on
Friday.
By "overseas partners" Wang meant Royal Dutch Shell, Kuwait
Petroleum Corp and Dow Chemical Co.
Shell didn't comment on the planned project. Instead, it only
said it was interested in any opportunity to drive up its business
in China.
The project, if it goes ahead, will create pressure on China
National Offshore Oil Corporation's (CNOOC) refinery in Guangdong
and the nearby $4.3-billion Nanhai petrochemical complex built by
Shell and CNOOC, analysts said.
A CNOOC press manager conceded the Sinopec project will heighten
competition. But CNOOC is still confident of South China's market
potential and its own differentiated market strategy.
"The Guangdong and South China market as a whole is robust
enough to accommodate more oil products and petrochemicals. The
region has a robust demand for oil because of its fast economic
growth. The manufacturing industry there too needs petrochemical
products in large amounts," the CNOOC official said.
More importantly, CNOOC's refinery and petrochemical plant in
Guangdong is different from those of its competitors' because it
uses heavy oil as raw material and rolls out high-end ethylene
products, the official said.
China Daily has learned that Sinopec incurred a loss in
processing of crude into oil products in July because of soaring
global oil prices.
Higher oil prices have created pressure on Sinopec's refineries,
deputy chief financial officer Liu Yun said on Friday.
Despite that it has not asked the government to raise fuel
prices, he said.
Sinopec is running its refining units at full capacity and made
a profit from processing oil in the first half, Liu said.
Sinopec Chief Financial Officer Dai Houliang said the company
would meet its full-year oil-production target because it had
increased its output in the second half. Also, the firm is expected
to raise the output of higher-priced chemical products, Bloomberg
quoted Dai as saying.
(China Daily August 11, 2007)
