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China Petroleum & Chemical Corp (Sinopec), ExxonMobile and Saudi Aramco have primarily agreed to set up a fuel marketing joint venture to sell oil products for the proposed US$3.5 billion petrochemical and refinery complex in East China's Fujian Province, the companies said yesterday.
The companies will submit the feasibility study to the State Council for final approval, the companies said in a joint statement. The joint venture plans to manage and operate more than 600 service stations and a network of terminals in the province.
The submission of the fuel marketing venture is a significant step to push forward the petrochemical complex.
The Fujian petrochemical complex, located in Quanzhou City in Fujian, plans to expand the existing refinery from 80,000 barrels-per-day (4 million tons-per-year) to 240,000 barrels-per-day (12 million tons-per-year). It also aims to construct a new 800,000 tons-per-year ethylene production facility, one of the largest in China.
Negotiations between partners over the project were suspended last year as the talks about the fuel marketing joint venture lagged behind.
"The submission of the fuels marketing joint feasibility study will mark a significant step in the development of the Fujian integrated ventures," the companies said.
The companies yesterday also signed an agreement to jointly fund the "front end loading" (FEL), including completing initial engineering and design, selecting contractors and finalizing costs for the petrochemical project.
At the conclusion of the FEL effort, the partners will make a final decision on joint venture formation and project construction.
The project is scheduled to be completed in the first half of 2008.
The refinery will be designed to refine and process Saudi Arabian crude.
Fujian Petrochemical Company Limited - a 50-50 joint venture between Sinopec and Fujian Province - holds 50 per cent of the shares in the petrochemical and refinery project. ExxonMobil and Saudi Aramco will split the remaining 50 per cent.
To meet China's growing demands for petrochemical products, foreign giants are partnering Chinese companies to build ethylene facilities. Royal Dutch/Shell is working with the China National Offshore Oil Corp to build a 800,000-ton-per-year ethylene cracking unit in Hainan Island, while BP and Sinopec are constructing a similar 900,000-ton-per-year facility in Shanghai.
(China Daily August 27, 2004)
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