Kuwait-China Refinery Expects Approval by End-2010

State-run Kuwait Petroleum Corporation (KPC) aims to obtain Chinese government approval for the Kuwait-Sino joint venture project to build a mega refinery and petrochemical complex in southern China's Zhanjiang City by the end of 2010, KPC's top official said.

"We are expecting to get final approval from the National Development and Reform Commission (NDRC) by the end of 2010," KPC CEO Saad Al Shuwaib, who is on his Asian tour at present, announced, adding that the investors still hope to begin commercial operations as early as 2013. NDRC is China's top economic planning agency.

The US$9 billion project with Asia's top refiner Sinopec includes a refinery of 300,000 bpd, ethylene cracker with the capacity of one million ton per year and a retail network in and around Guangdong Province, where the plant will be located.

The joint venture is currently undertaking a public consultation in Zhanjiang over the plan late February, the final major hurdle before submitting the Environmental Impact Assessment (EIA) and the Project Application Report (PAR) to the Ministry of Environmental Protection for Beijing's final nod.

OPEC-member Kuwait will supply all the crude to the refinery, which could be China's biggest joint venture in its kind. Kuwait Petroleum International (KPI), KPC's international refining and market unit, has been representing Kuwait in talks with the Chinese side.

Asked about British oil major BP Plc's possible participation in the project, Al Shuwaib answered, without elaborating, "We are in talks with some international oil companies. It may take time to decide our partner, as there are many options." KPC and Sinopec will each hold an equal 50% stake in the joint venture, with KPC planning to give 20% of its share to their potential international partners.

Europe’s largest oil firm Royal Dutch Shell said in December 2009 it has pulled out of talks to join the project due to "strategic and commercial considerations," bringing a chance for other international oil companies. - KUNA, Zawya