Cambodia's First $2.3 Billion Refinery to Be Built by China's Sinomach

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Cambodia's first oil refinery will be constructed by the Cambodian Petrochemical Company (CPC) and Sinomach-China Perfect Machinery Corporation (Shanghai, China). The 100,000-barrel-per-day plant is scheduled for completion at the end of 2015.

President of Sinomach Zhang Sugang said the refinery project will require an investment of $2.3 billion and will be constructed on an 80-hectare site on the boundary of the Preah Sinouk and Kampot provinces.

At a signing ceremony covering the agreement and the engineering, procurement and construction contract for Sinomach, Mao Chetra, administration chief of CPC, said that the refinery would be built with high-end, state-of-the-art technology, which he claimed had never been used in Southeast Asian countries to date.

"The proposed plant will help boost the development of the Cambodian economy, increase state revenues and generate thousands of jobs," he said. The refinery will produce a range of fuel types to meet local demand.

Demand for oil and fuel processing is expected to reach 3 million to 4 million tons annually in Cambodia as the economy continues to grow. The country's Ministry of Commerce reports that $1.33 billion was spent to purchase 1.35 million tons of oil from Vietnam, Thailand and Singapore in the first 10 months of 2012.

The Philippines News Agency reports that Cambodia's coastal waters are believed to be rich in oil and gas and have not been exploited. Deputy Prime Minister Sok An said that Chevron (NYSE:CVX) (San Ramon, California) invested about $150 million for oil and gas exploration in Cambodia's offshore Block A, and it is estimated that the company needs to invest a further $600 million to exploit the oil and gas from the block.

Negotiations are taking place between the government and the company on the issue of tax payments. The government expects to earn tax revenues of $200 million to $500 million annually from the oil and gas sector when production begins.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.