By OGJ editors
HOUSTON, Aug. 26 -- A $3.5 billion project to establish a world-class integrated refining and chemicals complex at Quangang, Quanzhou City near Meizhou Bay in Fujian Province, China, moved forward Tuesday when potential sponsors agreed to jointly fund the project's front-end loading (FEL) design. A marketing initiative also is planned. Together, the two undertakings will represent the first fully integrated Sino-foreign project to meet China's rapidly growing demand for petroleum and petrochemicals.
The integrated project involves expanding an existing refinery to 240,000 b/d from 80,000 b/d, upgrading it to refine and process sour Arabian crude, and adding a chemical complex comprised of a new 800,000 tonne/year ethylene steam cracker, polyethylene and polypropylene units, and a new 700,000 tonne/year paraxylene unit.
FEL activity includes completing initial engineering and design, selecting contractors, finalizing cost estimates, and preordering long-lead-time equipment. At the conclusion of the FEL effort, the parties will make a final decision on joint venture formation and project construction. Completion currently is envisioned for first half 2008.
The Fujian integrated project, when formed, will be a Sino-foreign joint venture of Fujian Petrochemical Co. Ltd. (FPCL) 50%, ExxonMobil China Petroleum & Petrochemical Co. Ltd. 25%, and Aramco Overseas Co. BV 25%. FPCL is a 50:50 JV between China Petroleum & Chemical Corp. (Sinopec) and the Fujian government.
Marketing initiative planned
In addition, a second JV comprised of Sinopec 55%, ExxonMobil 22.5%, and Saudi Aramco 22.5% will submit to the Chinese government a joint feasibility study (JFS) defining plans for a fuels marketing system to manage and operate more than 600 service stations and a network of terminals throughout Fujian Province to market the products produced by the Fujian integrated project.
The Fujian Marketing JV will be formed upon approval by the Chinese government of the JFS and the JV contract, along with the parties' completion of all required contracts, agreements, and documentation.