Petrochina Resumes Sichuan Refinery Construction

Source: Reuters 7/22/2009, Location: Asia

PetroChina has started building a 2.5 million tonne-per-year (tpy) catalytic cracker as well as several other units in Sichuan, part of the largest refining and chemical complex in southwestern China.

The second-largest refiner in China aims to fully start civil engineering works, complete underground works and finish placing orders for key equipment within the year, said a report posted on the website of CNPC.

PetroChina halted the 200,000 barrel-per-day (bpd) refining and 800,000 tonne-per-year ethylene project in Pengzhou city last year after an earthquake in the west part of Sichuan killed more than 80,000 people and destroyed numerous industrial and civil facilities.

The National Development and Reform Commission, China's top economic planning ministry, gave the project the go-ahead later and PetroChina planned full-scale construction this year.

PetroChina did not say when construction would be completed or how much was needed for the project, which was previously estimated to cost 40 billion yuan ($5.9 billion) and scheduled to be ready in 2010, a target date which now seems unfeasible.

The refinery was supposed to process crude oil pumped from the northwestern Xinjiang region and Kazakhstan via a planned pipeline.

Local residents staged a rare protest in early May last year against the plant, which is close to Chengdu, the capital of Sichuan, due to environmental concerns although the project was expected to provide many jobs.

China has put several new and big refineries into operation this year after repeated delays and will add more capacity in coming months, at a time when fuel demand growth slowed in the wake of the global financial crisis. But additional refining capacity is expected to be limited next year based on both the number and construction progress of existing projects.

The National Energy Administration set a goal to raise the country's refining capacity to 440 million tonnes, or 8.8 million bpd, by 2011 by building new refineries including Sichuan and expanding some existing plants.


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