Sinopec to Finish 10 Million-Ton Refinery in Qingdao Soon

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Petroleum and Chemical Corporation's (Sinopec) (Beijing) refinery in Qingdao City of Shandong Province was recently put into a trial run, which is expected to be complete in four months. According to the project's design, the refinery will process 10 million tons per year of imported crude oil to produce about 1 million tons of gasoline, 1 million tons of kerosene, 5 million tons of diesel, 1 million tons of naphtha, 800,000 tons of liquefied petroleum gas and alike, worth more than $4 billion. The gasoline and diesel can reach Europe III emissions standard.

The products will be mainly sold to areas around Beijing and Shandong and Hebei provinces. Sinopec has also set up a product chain with domestic and overseas consumers ready to buy. The project's budget was $1.7 billion. Sinopec holds an 85% stake, leaving the remaining portion to Shandong International Trust Investment Company (Qingdao) (10%) and Qingdao Guoxin Industrial Company (Qingdao) (5%).

In 2008, Sinopec is expected to import 5.6 million tons of crude oil from the Middle East beginning in May, producing 3.7 million tons of processed oil. Currently, Saudi Aramco Company Limited (Dhahran, Saudi Arabia) has been talking with Sinopec to provide crude oil, but a deal has not been made. Aramco showed interest in 1992 in building a large refinery in Qingdao, but China changed its energy policy and hindered those plans. After years of preparation, Sinopec, Shandong's provincial government and Qingdao's municipal government signed an agreement in early 2001 and began construction in mid-2005. Besides the Qingdao project, Sinopec has a 12 million-ton refinery in Fujian Province That is expected to begin operation in early 2009.

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