UPDATE 2-CNPC, Shell refinery JV in deal with local govt
* Shell likely to lead in the Shell-Qatar side* Imported condensate eyed as feedstock for petchemBEIJING, Oct 13 (Reuters) - A proposed oil refining and
petrochemical joint venture between China’s CNPC, Royal Dutch
Shell Plc and Qatar signed an initial agreement with
local authorities in east China’s Zhejiang province, where the
mega project will built, the Chinese company said on Thursday.The project, to include a 400,000-barrel-per-day oil
refining and 1.2 million tonnes-per-year ethylene plant, was
approved by the National Development and Reform Commission, the
country’s macro planner, in June, industry officials said.Pending final government approval, which also includes
environmental clearance, the greenfield refinery would give
Shell and Qatar their first solid foothold in the world’s second
biggest oil consumer, which is in the midst of a refinery
building boom.The Taizhou venture, in coastal Zhejiang province, will use
imported condensate and other raw materials to produce ethylene
and other petrochemicals, CNPC said in a company newspaper.”The agreement further clarifies work scope and targets for
each side, reflecting sincere intentions to cooperate,” it said.Qatar is the world’s largest liquefied natural gas
(LNG)producer and pumps increasing amounts of condensates as a
by-product of its gas production.In January, Qatar Oil Minister Abdullah al-Attiyah and Wang
Yong, head of the state-owned Assets Supervision and
Administration Commission (SASAC), which is both a regulator and
shareholder in most of China’s big state-owned companies,
pledged to strengthen cooperation in the oil and gas sector and
discussed the Taizhou project.Industry experts told Reuters that the project, likely to
cost close to $10 billion, would be led by Shell on the foreign
partners’ side. Such an alliance follows a giant supply
agreement between Qatar and China.”The project looks promising to win Chinese government’s
final blessing, as China may see Qatar as quite a stabilising
factor among the Middle East resource nations,” said an industry
veteran.CNPC, parent of PetroChina , Asia’s top oil and gas
firm, will take 51 percent stake in the project and Shell and
Qatar to have 24.5 percent each, according to Chinese media
reports.China guards its fuel market tightly against foreign
participation. So far only a few foreign firms, including Exxon
Mobil , Saudi Aramco and Total , via joint
ventures with Chinese partners, have direct marketing access to
the roughly 9 million bpd fuel market, the world’s second
largest after the United States.
