Kuwait and China agree on cooperation for refinery venture

Apr 28, 2009 02:00 AM

Kuwaiti Oil Minister Sheikh Ahmad Al-Abdullah Al-Sabah and Chinese Vice-Premier Li Keqiang reaffirmed their commitment to realize a $ 9 bn refinery project in south China's Guangdong Province on schedule, with considering relocation as an option.
During their talks in Beijing, Li pledged cooperation for the joint project and expressed hope that the two sides will reach a mutually acceptable solution for the refinery's location, Kuwait Petroleum International (KPI) Business Development Director Meshari Al-Mahmoud, who accompanied the minister, told.

"Regardless of its location, I hope the project will proceed as scheduled and stay within a set budget," Li was quoted as telling the minister. In response, Sheikh Ahmad told Li that Kuwait would consider the Chinese-proposed option if the relocation plan will be able to catch up with schedule on a budget, according to Al-Mahmoud.
The Sino-Kuwaiti oil refinery and petrochemical complex in Guangdong, slated to be operational in 2013, was originally planned to be built in Nansha area of provincial capital Guangzhou. However, the Chinese authorities are considering relocating the plant from Nansha amid growing concern over the environment impact on the densely populated area.

The minister is also scheduled to discuss the issue later with provincial Communist Party chief Wang Yang, Guangdong's top leader. The project would be the largest Sino-foreign joint venture in China. According to the minister, the envisaged refinery will be adopting state-of-the-art environmental technologies that will meet one of the highest Health, Safety Environment Standards.
Kuwait signed MoU with China in 2005 to construct the integrated complex, in hopes of participating in the long-term development of hydrocarbon sector in the world's second-biggest oil consuming market. In 2006, the Chinese central government and the National Development and Reform Commission, China's top economic planning agency, gave a preliminary approval of the project and designated Nansha as its site.

The envisaged refinery will be designed to process 100 % Kuwaiti crude supplied by state-run Kuwait Petroleum Corporation (KPC) with a capacity of 300,000 bpd, and the ethylene cracker unit will have an annual production capacity of 1 mm tons. KPC's subsidiary KPI has teamed up with China's biggest oil refiner Sinopec Corp. for the project.
The minister, who was in China for a five-day visit, also met with Sinopec Chairman Su Shulin to discuss closer cooperation in the refinery project and energy sector.

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