CNPC Signs Agreement with Province for Refining, Petrochemical Base

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Researched by Industrial Info Resources (Sugar Land, Texas)--China National Petroleum Corporation (CNPC) (Beijing) signed a framework agreement in December with the government of Yunnan Province to promote the construction of an oil refining and petrochemical base in Yunnan. CNPC said it will begin conducting research on the refinery project. Once the project is approved, a 10 million-ton-per-annum (TPA) refinery will be set up in the province. A 1 million-TPA ethylene project will be built with the refinery to provide raw materials for the development of Yunnan's petrochemical industry. Vice Provincial Gov. Luo Zhengfu and CNPC Vice General Manager Liao Yongyuan signed the agreement on behalf of the two groups.

Yunnan does not have an oil field or a large oil refinery. It mainly relies on refineries in southern and northwestern China for its refined oil supply. The long distance has increased the cost of fuel in the province. Being at the far end of the national oil supply chain, Yunnan is often plagued by "oil starvation."

According to the agreement, Yunnan's government will support CNPC in establishing an oil pipeline network, a refined oil sales network and in constructing an ethanol gasoline dispatch center in the province. The pipeline linking Yunnan's capital city Kunmin and its tourism center Dali will be built in the near future. Pipelines between Kunmin-Mengzi, Kunmin-Pu'er and Kunmin-Qujing will be built later.

In addition, CNPC and Yunnan's government have also decided to formulate and carry out plans to build natural gas pipelines and for a gas business.

The China-Myanmar oil pipeline will enter China through Yunnan. The designed transportation capacity of the oil pipeline's first phase is 20 million TPA. Upon the completion of the China-Myanmar pipeline project, with its 10 million-ton refinery, Yunnan can expect to become an important hub for CNPC in Southwestern China.

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