China is planning to boost its refining and petrochemical capacities ahead of the completion of a Kazakhstan-China pipeline and amid reports that Kazakhstan will substantially increase its production of oil, condensate, and natural gas in the coming year.
PetroChina Co. plans to spend $3.29 billion to expand the capacity at a refinery and petrochemical complex in Dushanzi in Northwest China’s Xinjiang province, the South China Morning Post (SCMP) reported on Feb. 15.
The expansion will sharply increase the complex’s refining capacity to 10 million tonnes/year (t/y) from 6 million t/y currently and its ethylene capacity to 1.22 million t/y from 220,000 t/y, said the paper.
The project will raise PetroChina’s refining capacity by about 10% and its ethylene capacity by about 55% over last year’s levels.
The Dushanzi undertaking, to be completed by 2008, is part of China’s strategy to import crude oil from Central Asia after Beijing failed to secure a near-term supply via pipeline from Russia, although that option could reopen in the future (OGJ Online Jan. 17, 2005).
The refinery-petrochemical expansion will complement a 988-km oil pipeline that CNPC and Kazakhstan’s national oil company KazMunaiGaz began constructing last August from Atasu in Kazakhstan’s Karaganda region to the border with China at the Druzhba-Alashankou railroad terminal.
The pipeline will carry 10 million t/y of crude oil to China when it comes on stream early next year, increasing to 20 million t/y by 2011. The pipeline is also important for reducing China’s dependence on the Malacca Straits for its oil imports, as the straits are plagued by pirates and carry the added threat of terrorism (OGJ Online, Jan. 3, 2005).
Kazakh production up
China’s Dushanzi expansion coincides with reports that Kazakhstan plans to step up its production of oil, gas condensate, and natural gas.
“Forecast output of oil and gas condensate will reach 60 million tonnes in 2006 and about 72 million tonnes in 2008,” Kazakh First Deputy Energy and Mineral Resources Minister Baktykozha Izmukhambetov told a meeting in Astana on the country’s socioeconomic development in 2006-08.
In its report of the meeting, the Kazakh-Interfax news agency said Kazakhstan produced 59.2 million tonnes of oil and gas condensate in 2004.
Izmukhambetov said the production gain would come from work in Tengiz and Ozen fields and start-up of Kashagan field in the Caspian Sea. Kashagan production is expected to start in 2008 at 500,000 tonnes during the year, the deputy minister said. ✦