Bloomberg News

PetroChina, Shell, Qatar Agree to Build Refinery in Zhejiang

October 13, 2011

(Updates comments by Shell in fourth paragraph.)

Oct. 13 (Bloomberg) -- PetroChina Co., Royal Dutch Shell Plc, Qatar Petroleum and Zhejiang province’s Taizhou city government signed an agreement to build a petrochemicals and refining complex in one of eastern China’s manufacturing hubs.

The three oil companies plan to use imported condensate oil to produce petrochemical products including ethylene, PetroChina’s parent China National Petroleum Corp. said in a statement on its website today without providing further details.

The project will “significantly” improve Zhejiang province’s self-sufficiency in petrochemical products, the statement said. PetroChina spokesman Mao Zefeng didn’t immediately respond to two phone calls seeking comment.

“We hope to see the central government’s approval in due course,” Shell China said in an e-mail response to Bloomberg. “There is no change of partnership since the signing of the letter of intent in 2008.”

PetroChina will hold a 51 percent stake in the venture, while Shell and Qatar Petroleum will each own 24.5 percent under the agreement signed by the three companies to jointly start studying the complex, Shell said in 2008.

The three oil firms plan to invest about 80 billion yuan ($12.5 billion) to build a 20 million metric-ton-a-year, or 400,000 barrel-a-day, refinery in Taizhou, the local municipal development and reform commission said in a statement in 2009. The complex will also include a 1.2 million ton-a-year ethylene plant, according to the statement.

The National Development and Reform Commission, China’s top economic planner, approved in March China Petroleum & Chemical Corp. and Kuwait Petroleum Corp.’s plan to build a 15 million ton-a-year or 300,000 barrel-a-day refinery in the southern province of Guangdong. The venture will also have a 1 million ton-a-year ethylene plant.

--Jing Yang. Editors: Mike Anderson, Ryan Woo.

To contact the reporter on this story: Jing Yang in Shanghai at jyang251@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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