British oil giant BP is negotiating with China to build a sizable refinery in China, the world's second-largest fuel market.
While BP China would not disclose any possible partners, BP president Chen Liming told China Business News that the company is currently negotiating with domestic companies to build a joint-venture refinery.
An unnamed source told China Daily that BP was working with Chinese oil majors PetroChina and Sinopec, targeting three coastal cities for the project. BP is also working with PetroChina to build a plant in Shanghai, the source said, and is in talks with Sinopec on a refinery in Beihai, Guangxi Zhuang autonomous region or Zhanjiang in Guangdong province. The projects are all still in the early stages of negotiation and require government approval.
"We continually explore options to expand and deepen our business in the country and a refinery could potentially complement BP's current asset portfolio," said BP China in a statement to China Daily, in response to questions about the talks.
"With a total investment of $4.6 billion, BP is a leading foreign investor in the Chinese energy sector, with all the BP businesses, including upstream, retail and chemicals, alternative energy, represented in the country," the statement said.
As part of its petrochemical stimulus plan, China has plans to build three or four oil refining bases, each with a minimum refining capacity of 20 million tons a year, or about 400,000 barrels a day. The bases are to be located in the Yangtze River Delta, the Pearl River Delta and the Bohai Sea-rim economic zone.
Except for Exxon Mobil Corp., Saudi Aramco and France's Total SA, which own part of two of the mainland's 120 refineries, China has until now kept its oil refining markets confined to the country's two biggest oil companies, Sinopec and PetroChina.
Oil demand in China may rise to 4.2 percent next year, predicted the International Energy Agency July 10, with an increase of 333,000 barrels per day to 8.3 million bpd.
China has surpassed the United States as the largest auto market worldwide for the first half of 2009, boosting the need for fuel. In June China's car sales rose 36.5 percent from a year earlier.
BP, the world's third-biggest oil company revenue-wise, has a total investment of $4.6 billion in China. With PetroChina and Sinopec, it operates 500 service stations in China's two coastal provinces, Zhejiang and Guangdong. It also runs an ethylene plant in partnership with Sinopec with a capacity of 900,000 metric tons a year.
Share This Article With Planet Earth
