Chinese processing, construction and trading news

Shanghai Petrochemical
Sinopec Corp’s subsidiary Shanghai Petrochemical has announced that in January is processed a record amount of crude. 230 000 bpd were processed and the company plans on a processing rate of on average 200 000 bpd throughout 2010. This will be the highest processing capacity ever achieved by Shanghai Petrochemical.

Kuwait and China deal
Kuwait Petroleum Corp. expects to receive approval for a new 300 000 bpd refinery to be built in China by the end of 2010. The facility will cost approximately US$ 9 billion to construct and is scheduled to be online by as early as 2013.

Sinopec petroleum are expected to carry out the construction work as part of a 50/50 joint venture with Kuwait Petroleum Corp. Kuwait will supply crude for processing at the facility and also intends to offer a 20% stake to an international company. Until December 2009 Royal Dutch Shell was linked to this share.

Oil reserves
China has begun work on the second phase of its emergency oil reserves. The country is constructing storage bases in Zhanjiang and Huizhou, Guangdong province. This is part of a three phase project to help achieve energy security and meet demand, as China is the second largest energy consuming country in the world.

Phase one of the project is complete and holds approximately 16.4 million m3 of oil which will last about 30 days. The plans are to build enough storage capacity to hold 100 days worth of oil before 2020.

PetroChina
The state owned Chinese company PetroChina has completed initial work on a bid for the Grangemouth refinery, Scotland. This is the only oil processing facility in the country. The plant processes approximately 200 00 bpd and Ineos who currently own the complex are planning on selling at least part of the plant to PetroChina.

The purchase of a stake in the Grangemouth facility is part of the Chinese company’s acquisition strategy as it wishes to reduce dependence oil and increase international operations and cooperation to meet domestic demand. In the last year alone acquisitions have been made in Canada, Singapore, Argentina and Japan.

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