China's top economic planner has approved a plan by the China
National Petroleum Corporation (CNPC) to build a huge refinery in
Guangxi in south China.
With an investment of 15.2 billion yuan (US$1.95 billion) and a
planned annual processing capacity of 10 million tons, the proposed
Qinzhou refinery in the Guangxi Zhuang Autonomous Region will be
one of the core energy projects during the country's 11th Five-Year
Plan (2006-10), CNPC said in a statement yesterday.
"It is expected to come on stream before 2008 and play a crucial
role in the country's new energy grid," the National Development
and Reform Commission (NDRC) said.
The project is the largest refinery in the southwestern part of
the country. It is expected to better meet demands in the region
and boost the refining industry, the NDRC said.
Zhang Zhiguo, a press official with Sinopec, said: "It will
benefit the fuel-thirsty southwest, and is surely positive for the
overall energy grid."
However, he admitted the refinery may impose some competition
for Sinopec, Asia's largest refiner.
Once the project is completed, CNPC's fuel transport costs to
the southwestern region will be reduced. As a result, the retail
price will be more flexible within the government-set range, Zhang
said.
Han Xuegong, an analyst with CNPC, said it was right for the
NDRC to take the competition factor into consideration when
reviewing new projects.
Sinopec previously wanted to build an 8-million-ton refinery in
Guangxi. However, the NDRC did not approve the application.
"Guangxi plays an important role in serving as a bridge to
import crude oil and export oil products to Southeast Asian
markets. That is why the two firms are competing to have a foothold
there," said Han Wenke, director of NDRC's Energy Research
Institute.
The proposed CNPC refinery will also supply fuel to Yunnan and
Guizhou provinces in Southwest China.
(China Daily February 16, 2007)