PetroChina's Expanded Dushanzi Refinery to Begin Operation by the End 2009

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Researched by Industrial Info Resources (Sugar Land, Texas)--Insiders leaked news that construction of PetroChina's (NYSE:PTR) (Beijing), 70 million barrel per year refinery in West China's Xinjiang Autonomous Region is close to completion and it will come on stream by the end of this year.

Dushanzi refinery, one of China's major refineries in the Northwest, currently processes about 42 million barrels of crude oil per year and produces 220,000 tons of ethylene per year. In August 2005, PetroChina started re-constructing Dushanzi refinery with the aim of turning it into an integrated refinery and petrochemicals complex, which will refine 1.4 million barrels of crude per year and turn out 1.2 million tons of ethylene per year.

PetroChina says in the development plan that after being re-constructed, the new Dushanzi refinery will include 20 refining units and 12 petrochemical units. The plan says that the refining units should have been ready for a trial run by last August and the ethylene facilities should have been half done.

Days ago rumors said that Dushanzi refinery would go for an official run this August. However, when asked by reporters, a source close to Dushanzi's management replied that the refinery had received the notice of official run from PetroChina headquarters. He did confirm that all construction was close to completion and the project would surely be able to go for an official run by the end of this year.

Insiders analyze that the delay of the notice is because PetroChina is waiting for a rebound of refined oil demand in the market. Statistics show that in May PetroChina's crude oil refining registering a growth of 5.86%, and represented growth for three months in a row.

It's reported PetroChina has a planned investment into the refinery project of around $4 billion. This project is being developed by Dushanzi Petrochemical Corp, which is a subsidiary of PetroChina, and will refine crude oil received from Kazakhstan.

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