PetroChina, Shell, Qatar Petroleum in $11.7bn Taizhou project

06 August 2009 08:12  [Source: ICIS news]

SHANGHAI (ICIS news)--PetroChina, Royal Dutch Shell Plc and Qatar Petroleum International plan to jointly invest yuan (CNY) 80bn ($11.7bn) to construct a petrochemical complex at Taizhou in China's eastern province of Zhejiang, a Chinese government official said on Thursday.

The petrochemical complex would house a 20m tonne/year refinery, a 1.2m tonne/year cracker, a berth for crude carriers with 300,000 tonne capacity and a 23km-long undersea oil transport pipeline, said Wang Kan, an official at the Taizhou Development and Reform Commission (TDRC).

TDRC is a local government unit of the National Development and Reform Commission, which grants approvals for major infrastructure projects in China.

"We are lacking fuels in east China. The new refinery will ensure fuel supply after it comes on stream," Wang said.

PetroChina had sought project approval from the Chinese government in January 2009, according to TDRC's website.

"The feasibility study and the environmental impact assessment of the large project are still [on]going. The government could approve only after all the paperworks are prepared well," Wang said.

The companies signed a letter of intent (LOI) in June 2008 to start joint preliminary studies to assess the viability of building a petrochemical complex and marketing its products in China, Shell said on its website.

Qatar Petroleum would provide crude oil for the refinery through imports while Shell would provide advanced production technology, Wang said.

"As for the downstream chemical plants, they are also under consideration. And we expect some downstream chemical [plants] to be built in the future," he said.

PetroChina would hold a 51% stake in the venture, while Qatar Petroleum International and Shell would each hold a 24.5% stake, based on TDRC's statement.

($1 = CNY6.83)

Bohan Loh contributed to this article

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