Sinopec to Start Up Fujian Refinery Next Spring

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Petroleum and Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing) is nearing completion of a refinery and ethanol project in Fujian province and will begin running it early next spring. Sinopec said in a news release that its Fujian branch has finished about 92% of the construction. The project's investors include Sinopec (50%), Saudi Arabia's state-owned oil company Saudi Aramco (25%) and ExxonMobil Chemical China, a subsidiary of ExxonMobil Corporation (NYSE:XOM) (Irving, Texas) (25%).

The project involves expanding the refining capacity from the current 85,000 barrels per day (BBL/d) to about 255,000 BBL/d and building a new 800,000-ton-per-year ethanol cracking unit, an 800,000-ton-per-year polyethylene unit, and a 400,000-ton-per-year polypropylene unit. The refinery will mainly process sour crude from Saudi Arabia.

Since July 2007 when construction was started, the investors have overcome climate problems and hurdles in the procurement of equipment, and finished the atmospheric and vacuum distillation units, gas recovery unit, sulfur recovery unit, sour water stripping and solvent reclamation items, some of which are already running. A light hydrocarbon recovery unit and a 700,000-ton-per-year aromatics combination unit are expected to be finished soon.

Sinopec Fujian President Lu Dong said in a news release that by the end of 2008, all mechanical work will be finished and in the spring of 2009, the company will start production.

The factory will be able to provide about 155,000 BBL/d of Euro-III standard refined oil, 1.28 million tons of polyolefin, 700,000 tons of paraxylene and other products each year worth more than $8.8 billion. An August report by Xinhua News Agency said Sinopec and the Fujian government are seeking to double the refining capacity to about 500,000 BBL/d.

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