PetroChina plans new investments in oil sector

PetroChina is the biggest oil company in the People’s Republic and it is currently planning investments up to September 2007 in order to boost its refining capacity in the western-most province of Xinjiang, said Liu Mingrong, director of Dushanzi Petrochemical. Estimated cost: 26.2 bn yuan.
“The project is built mainly to process oil imported from Kazakhstan,” Mr Liu said, but it is also expected to start producing ethylene as early as the third quarter of 2008. Ethylene is used in making plastics, food wrapping and electrical insulation.

Mr Liu said PetroChina plans to increase refining capacity at the Dushanzi Petrochemical in Xinjiang to 10 mm tpy by 2008 from its current level of 6 mm. The project will produce 1.2 mm tons of ethylene annually up from 220,000 tons now.
According to PetroChina’s 2004 report ethylene production rose 1.5 % to 1.85 mm tons last year over the previous. PetroChina drills for gas and oil at home but is also exploring abroad to compensate for the depletion ofits biggest and oldest oil field in Daqing which started production back in 1959.

The failure of China's oil companies to match increased demand from economic expansion sent imports soaring by 35 % last year. PetroChina's crude oil production rose a mere 0.4 % to 777.9 mm barrels, compared with a 14 % upsurge in China's demand over the same period. Natural gas output rose instead 21 % to 839.4 bn cf over the same period.
Production from Daqing fell to 46.4 mm tons last year from 48.4 mm tons in 2003. Output from Heilongjiang, which accounts for 50 % of PetroChina's production and 33 % of the nation's total, is being cut to prolong Daqing's life.