Chinese Firms Building More Biodiesel Refineries

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Researched by Industrial Info Resources (Sugar Land, Texas)--Many Chinese companies have been seeing business opportunities in the tight oil supply in recent years and have begun to invest in related industries. Guizhou Zhongshui Energy Company's first $6.8 million, 20,000-ton-per-annum (TPA) biodiesel refinery was launched in late December 2007. Presently, the refinery uses waste cooking oil as raw material and will switch to the fruit of the “Tung oil tree” (aleurites fordii), a tree with high oil content that is commonly found in southeastern China's mountainous areas, starting in 2008.

Zhongshui Energy Company, one of Guizhou Province's largest power enterprises, operates many power plants that are part of the "west-east power transfer" project. So far, Zhongshui has already commissioned farmers in Luodian, Anxian and Longxian to grow 13,334 hectares of the Tung oil tree. It has also signed contracts with China Petroleum and Chemical Corporation (Sinopec) (Beijing) regarding a joint-venture oil refinery, and in the marketing and sales of products.

Investments into the biodiesel industry have been on an upswing in the past a few years in the southwestern Chinese provinces of Sichuan, Guizhou and Yunnan. Three key Chinese oil companies have constructed biodiesel production bases in the area. Sinopec plans to build 30,000-TPA to 50,000-TPA biodiesel projects in Yunnan and Guizhou. China National Petroleum Corporation (Beijing) has carried out a 100,000-TPA biodiesel project in Sichuan. China National Offshore Oil Corporation (Beijing) has signed an agreement with Panzhihua City to build a 100,000-TPA biodiesel refining base in Panzhihua.

Some U.S., British and German energy companies and automakers have signed cooperation agreements with southwestern China's provinces regarding biodiesel projects. The Tung oil tree biodiesel project has been incorporated into the China-Germany Renewable Transportation Energy Cooperation framework agreement.

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