CNPC's Huilai Oil Refinery in Guangdong Receives Final Approval

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Researched by Industrial Info Resources China (Beijing, China)--Following the receipt of preliminary approval from China's National Development and Reform Commission (NDRC) to kick off pre-stage preparation in December 2009, China National Petroleum Corporation's (CNPC) 428,000-barrel-per-day (BBL/d) Huilai Oil Refinery received final approval from the state council recently.

According to the joint venture agreement, the CNPC (60%) and Venezuela National Oil Company (40%) will jointly invest for a 1 million-BBL/d refinery and a 1 million-ton-per-year ethylene petrochemical complex in the Dananhai International Petrochemical Comprehensive Industrial Park of Huilai District, Jieyang City in South China's Guangdong province. According to the planning, a 428,000-BBL/d refinery with a total investment of about $9 billion will be built in the initial stage, including a 50,000-ton level oil port built in the industrial park, a 300,000-ton level crude oil port and a 600,000-ton crude oil storage facility will be built on the coast of Huilai, along with pipeline infrastructure between the port and the refinery.

As reported, the CNPC currently has seven 214,000-BBL/d refineries and a total primary processing capacity of 3.2 million BBL/d, but its refining facilities are mainly concentrated in northwestern and northeastern China, including the Xinjiang, Gansu, Ningxia, Heilongjiang, Jilin and Liaoning provinces. However, China's major consumption of refined products is in the southeast and south. In order to change the situation of "transporting oil from the north to the south", or "transporting oil from the west to the east," the CNPC is currently building its 428,000-BBL/d refinery in Taizhou in East China's Zhejiang province, as well as a 214,000-BBL/d refinery in Sichuan.

The Refining Planning Institute of China Petroleum Planning Engineering Institute (CPPEI), a support organization for decision-making directly under PetroChina Company Limited (NYSE:PTR) (Beijing), the listed flagship of the CNPC, is responsible for the pre-stage preparation of the project. Upon completion, the project will be mainly used to process the heavy oil imported from Venzuela.

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