BEIJING – Sinopec Corp <0386.HK> won initial approval last month from China's top economic planner for a plan to build a $10-billion refinery and petrochemical complex in Shanghai, two company officials said.
Continue Reading Below
China, the world's largest net importer of oil, is likely to add 3 million barrels per day, or a quarter of new refining capacity, between 2013 and 2015 to fuel economic growth, industry officials and Chinese media estimate.
Top Asian refiner Sinopec has started formal planning for the 400,000 barrels-per-day refinery and a 1 million tonnes-per-year ethylene project in a plan to curb pollution by shifting an old plant to Shanghai's southern edge, the officials told Reuters this week.
The new Sinopec plant, designed to process mostly imported crude oil, will be built in the Caojing industrial park, some 50 km from the centre of Shanghai.
"The initial approval allows us to start planning work," said a company official, adding that Sinopec had agreed with Shanghai authorities in 2011 to shift some of the facilities at its Gaoqiao refinery to the new site once it was ready.
The official declined to be named as he is not authorized to speak to media.
Continue Reading Below
The Gaoqiao plant in the densely-populated Pudong area, which runs two crude processing units with a total refining capacity of about 240,000 bpd, has stirred up resentment after at least four refinery blasts in the last few years, local media have reported.
Growing public awareness of the need for a cleaner and safer environment has prompted central economic planners to limit the expansion of big industrial projects such as oil refineries and the construction of chemical plants near residential areas.
The new Shanghai plant will need a final government nod and environmental clearance, the officials said. It should take about five years to build and will be ready near decade's end.
Similar investments could also be delayed due to tougher environmental rules, changing market conditions and land issues.
Plans for a $13-billion refinery and petrochemical complex in the eastern city of Taizhou, in which Royal Dutch Shell
The plan for Sinopec's Shanghai refinery includes a new crude oil terminal with the capacity to receive a 300,000-tonne very large crude carrier.
The whole refinery and petrochemical project could cost more than 60 billion yuan ($9.84 billion), domestic media have said.
Near the site of the new plant, Sinopec operates a similar complex, Shanghai Petrochemical Corp, with a 320,000-bpd refinery and an 850,000-tpy ethylene plant. ($1=6.0945 Chinese yuan)
(Reporting by Beijing Newsroom; Editing by Himani Sarkar and Clarence Fernandez)