China’s Sinopec Corp is set to launch a new $5.7 billion refining and petrochemical complex in the south of the country in second-quarter 2020 using crude oil from Kuwait as a key feedstock, industry officials with knowledge of the matter said.
The project being developed by Asia’s top refiner, a 200,000 barrels-per-day (bpd) plant in Zhanjiang, a coastal city in Guangdong province, will become the third greenfield refinery-petrochemical complex to be built in China within a space of two years.
Zhanjiang is Sinopec’s first major capacity addition since it launched a similar-sized Qingdao refinery on the east coast in 2009.
But the 40 billion yuan ($5.69 billion) complex comes on the heels of two privately invested mega-refineries – Hengli Petrochemical and Zhejiang Petrochemical Corp – that have piled fresh capacity into an already oversupplied domestic fuel market, where transportation fuel demand has slowed while China’s fuel exports have soared.
Sinopec is seeking to finalise a crude oil supply deal with Kuwait Petroleum Company (KPC) that will help boost Kuwait’s oil sales to China to a record of nearly 600,000 bpd next year, the sources said. They declined to be identified because they were not authorized to talk to the media.