PetroChina Liaoyang Petrochemical Begins Construction of 200,000 Barrel Per Day Refinery Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas)--PetroChina Liaoyang Petrochemical Company (Liaoning), a regional subsidiary of PetroChina Company Limited (NYSE: PTR) (Beijing), a division of state-owned China National Petroleum Corporation (CNPC) (Beijing) officially started Construction of a 200,000-barrel per day (bpd) refining expansion of the company's Liaoyang Refinery in northeast China's Liaoning province on July 9, 2009.

Initially built in 1974, Liaoyang Petrochemical currently has an annual crude oil processing capacity of 110,000 barrels per day (bpd), including an 110,000 bpd atmospheric and vacuum distillation unit and a 24,000 bpd hydrogenation refining unit commissioned in October 2006.

On February 17, 2009, China officially signed the $25 billion "Loan for Oil" agreement with Russia to establish a trade framework for long-term oil supply. Starting from 2011, Russia will supply 15 million metric tons of crude oil to China every year via a pipeline currently under construction.

The expansion project includes the construction a 20,000-bpd hydrogenation cracking unit, a 40,000-bpd hydrogenation refining unit, a 30,000-ton per year desulfurization and sulfur recovering unit, together with associated facilities such as storage tanks, circulating water plant and substation. Total investment of the project will be about $238 million, including $9.03 million in foreign exchange. The project is expected to begin operation by the end of 2010.

In addition to the production of high-grade diesel, the project will also produce petrochemical raw materials such as naphtha, which will optimize the resource and material configuration in Liaoyang Petrochemical and provide a powerful support for its downstream aromatics industry.

As an important support project to the Sino-Russia Petroleum Strategic Cooperation Agreement, Liaoyang Petrochemical will be the first 200,000-bpd level oil refinery aimed to process crude oil totally imported from Russia upon the completion of the project.

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