Sinopec Signs $3.5 Billion Refining and Petrochemical Project in Fujian Province

The largest oil refiner in Asia, a subsidiary of China Petroleum and Chemical Corp (Sinopec), has announced a long-awaited deal with foreign oil majors for a major refining and petrochemical project in Fujian province. The joint venture, Fujian Petrochemical, will expand an existing refinery and build a petrochemical production complex in Quanzhou, in partnership with ExxonMobil and Saudi Aramco. The project is estimated to cost $3.5 billion and is expected to be completed in the first half of 2008.

Key Takeaways:

• The joint venture, Fujian Petrochemical, will have a 50% stake in the project, while ExxonMobil and Saudi Aramco will each have a 25% stake.
• The refinery will refine Saudi crude oil, with an expansion of refinery capacity to 12 million tonnes of crude oil per year from 4 million tonnes.
• The new plant will have an annual ethylene capacity of 800,000 tonnes, a significant increase from the original plan.
• The project is expected to be completed in the first half of 2008, with operational changes prompted by soaring domestic demand for refined oil products.
• The deal was announced after four years of feasibility studies and contract negotiations, which were delayed due to disagreements over the type of crude oil to be refined and distribution rights for oil products.

The deal marks a significant development in China's refining and petrochemical industry, with the country's demand for refined oil products expected to continue rising.

Statistics:

• The project is estimated to cost $3.5 billion, a significant increase from the original price of $1.6 billion.
• The new plant will have an annual ethylene capacity of 800,000 tonnes, a significant increase from the original plan.
• The refinery has an expansion capacity of 12 million tonnes of crude oil per year.
• The project is expected to be completed in the first half of 2008.
• Domestic demand for refined oil products is expected to continue rising, driven by economic growth and urbanization.

Sources:

• "Sinopec Signs $3.5 Billion Refining and Petrochemical Project in Fujian Province" by Eric Ng.
• Asia's largest oil refiner, Sinopec's statement.
• Fujian Petrochemical's official website.
• Core Pacific-Yamaichi research report.
• Sinopec Shanghai Petrochemical's interim report.
• Sinopec Yizheng Chemical Fibre's interim report.