Total, KPC sign MoU for Zhanjiang, China petchem project

13 March 2012 15:40  [Source: ICIS news]

LONDON (ICIS)--Total has signed a comprehensive memorandum of understanding (MoU) with Kuwait Petroleum Corp (KPC) to join a 300,000 bbl/day refinery and petrochemicals project in Zhanjiang, Guangdong province, southern China, the French oil and gas major said on Tuesday.

The yuan (CNY) 59bn ($9.32bn) project is currently a 50:50 joint venture between China’s state-owned energy firm Sinopec and KPC, but KPC has been seeking a partner to share its 50% stake.

A 15m tonne/year refinery, 1m tonne/year cracker and downstream facilities for products such as polyethylene (PE), polypropylene (PP) and ethylene glycol (EG), are expected to be included in the project. 

The proposed refining and petrochemicals platform will be designed to process Kuwaiti crude as feedstock and to produce high-quality refined and petrochemicals products, Total said.

“Total, with its long experience in the downstream business in China coupled with know how in refining and petrochemicals operations, will add value to the China project,” said Farouk Al Zanki, KPC CEO.

Christophe de Margerie, Total chairman and CEO, said: “This agreement will be the keystone of a long-term relationship with KPC.”

He added: “The project is in line with our strategy of expanding in growth markets, based on a few highly competitive and integrated platforms.”

Total signed the MoU with Kuwait Petroleum International (KPI) and Petrochemicals Industries Company (PIC), two wholly-owned subsidiaries of KPC.

KPI, PIC and Total have agreed to form a consortium, which will potentially hold interests in two joint-ventures together with Sinopec.

The MoU sets forth the agreement among KPI, PIC and Total regarding the development of the project, Total said.

Total announced it was interested in investing in the project in Zhanjiang in February this year.

Financial details of the agreement were not disclosed.

($1 = CNY6.33)

By: Franco Capaldo
+44 (0)20 8652 3214

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