HONG KONG (Reuters) – Asia’s biggest oil refiner Sinopec Corp. said its plans with Saudi Arabia’s Saudi Aramco for a refinery in east China were on track and the companies were also talking of building commercial oil reserves.
Sinopec is in talks with state oil company Saudi Aramco for a refinery in the coastal city of Qingdao.
Industry sources said earlier this month the project would be delayed and the 200,000 barrels per day (bpd) refinery would aim to start up around September 2008 or later.
Sinopec President Wang Tianpu Wang said on Monday the project, with a total investment of 12.5 billion yuan ($1.65 billion), was on course.
Construction of the refinery would be completed by the end of this year and it would come on stream in the first half of 2008, he said.
“To a very large extent we are cooperating with Saudi Aramco on crude trade and … we are also discussing establishing commercial reserves in China,” Wang told reporters.
Sinopec, which imports 70 percent of the crude oil it refines, is building up its commercial crude reserves in the eastern cities of Shanghai and Ningbo, the southern city of Zhanjiang and the northern city of Caofeidian, Wang said.
Sinopec is also in negotiations with Kuwait Petroleum Corp on building a 12 million tonne-per-year refinery and 1.0 million tonne ethylene cracker in southern China.
Sinopec, also China’s second largest oil and gas producer, would proceed jointly with the Saudi company to develop any major find it might make under its contract to explore a deep-layer natural gas block in Saudi Arabia, Wang said.
“We’re pushing ahead according to the contract, and we’ve also made some discoveries with indications of oil and gas,” Wang said.
“Once we make a big discovery, Sinopec will jointly develop it with Saudi Aramco.”