China and Russia will cooperate on oil refinery
China and Russia may join together to build a $4-billion oil refinery in the north of Tianjin municipality to meet the growing domestic demand, according to the local government.
The project, which will be located in Binhai Industrial Zone of Tianjin, is developed by China National Petroleum Corp (CNPC) and Russia’s OAO Roseneft. It is capable of processing 10 million tons of crude oil every year.
According to the Tianjin municipal government’s sayings on its website, the construction of the project is planed to be completed in 2012. The project is part of the agreement signed by China and Russia in 2006 to enlarge the cooperation of oil and gas production between the two countries. Both sides set up a joint venture in Tianjin in 2007.
A spokesman from CNPC refused to make a comment on the project on March 2, 2009. The domestic media had reported that the oil refinery would use crude oil from Russia.
Under the loans-for-oil agreement which China and Russia signed in February of 2009, China will lend $25 billion to two major Russian oil companies in return for 20 years of sustained oil supplies from Russia.
The agreement also includes a construction of an oil pipeline linking Russian oilfields in eastern Siberia with northeastern regions in China. This first oil pipeline which links the two countries will come into use in 2010.
Analysts said that the Sino-Russian oil refinery would reduce the pressure of the increasing refined oil demand in the Bohai Bay area. The region, one of China’s economic powerhouses, has a rapid growing consumption of gasoline and diesel during the past years.
A large petrochemical complex is being built in Tianjin by the oil producer Sinopec. The project, which is expected to start operations by June, includes 1 million tons of annual ethylene production capacity and over 10 million tons of annual oil refining capacity.
“In line with China’s stimulus package for the petrochemical industry, we are now planning for more refineries in the country,” an official with CNPC told China Daily briefly on March 2, 2009.
The official who declined to be named said that CNPC’s refinery in Qinzhou in the Guangxi Zhuang autonomous region, which is also the country’s first giant refinery in southwestern regions of China, is expected to start operations by the end of 2009. The project can process 10 million tons of crude oil.
He said the second stage of this project, which is now being planned, is to add another 10 million tons of oil refining capacity.
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