(EnergyAsia, June 26 2014, Thursday) — Chinese state-owned companies are plodding away in talks with their counterparts in Kuwait and Ecuador to jointly develop two major oil refinery projects.
Sinopec and Kuwait Petroleum Co (KPC) expect to start up an integrated oil refinery-petrochemical complex in China’s southern Guangdong province by 2017 while China National Petroleum Corp (CNPC) is still locked in talks with Petroecuador to proceed on a proposed 200,000 b/d plant in the Latin American country despite media reports that a deal is imminent.
Sinopec and KPC signed an agreement last month to enhance cooperation in trading and storing crude oil, developing refinery projects and providing refinery engineering services. They signed the agreement in Beijing following a meeting between Chinese Premier Li Keqiang and Kuwaiti Prime Minister Sheikh Jaber Mubarak Al-Sabah.
In 2011, the two companies signed an agreement to jointly build a 15-million tonne/year refinery and an 800,000 tonne/year ethylene plant in the city port of Zhanjiang near Hainan island. Talks have made little progress.
In Ecuador, China’s plans to finance the construction of the proposed US$10 billion Refineria del Pacifico plant remain deadlocked over equity and financing terms after more than three years of discussions.
Media reports that a deal is imminent could prove premature yet again, with a consortium of Chinese banks now said to be ready to finance up to 70% of the project’s cost.
The joint venture’s original partners, Petroecuador and Venezuela’s PDVSA, had invited CNPC to take a 30% stake in the project with hopes that Chinese banks would provide the bulk of the financing.