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Guangzhou, capital city of South China's Guangdong Province, has been tipped as the location and Sinopec, China's largest refiner, as the Chinese partner for the US$5 billion Sino-Kuwaiti refinery.

 

Six cities in Guangdong have been vying to host the project, which is expected to be capable of processing 15 million tons of crude a year. PetroChina, China's largest oil firm, had been mentioned by some as the Chinese partner.

 

The central government has yet to give final approval for the details of the project, said an official with the Guangzhou municipal development and reform commission yesterday.

 

The municipal government has been actively pursuing the project and is confident of winning it, said the official.

 

This project is seen as an extension of the refinery of Sinopec's Guangzhou company, he said.

 

It could be located on the current site of Sinopec Guangzhou or in Nansha District with the latter, having a better ocean port, being favored by the municipal government.

 

An executive at Sinopec Guangzhou said Sinopec was sure to participate in the project and Nansha was the possible location.

 

Sinopec and the Kuwaiti side held talks on this issue last week, he said.

 

The new project is intended to have ethylene facilities with an annual capacity of 1 million tons.

 

Sinopec Guangzhou is expanding its annual refining capacity to 13 million tons by the end of this year from the current 8 million tons and ethylene producing capacity to 800,000 tons from 200,000 tons.

 

Sinopec accounts for more than 60 percent of sales of refined products in Guangdong.

 

Having a strong demand for oil products, Guangzhou is a good choice for the new refinery as it is conveniently connected to other Guangdong cities.

 

So said Yao Daming, head of the oil products department of Guangdong Oil and Gas Association.

 

The new refinery should help ease the shortage of refined products the province has experienced since last year, he said.

 

Refineries in Guangdong were capable of processing 20.6 million tons of crude and producing 12.33 million tons of petroleum, kerosene and diesel in 2003, both of which accounted for 10 percent of the total in the country, according to the provincial government.

 

(China Daily June 27, 2006)