PetroChina Co. plans to spend 27.2 billion yuan ($3.29 billion) to expand the capacity at an oil 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 from 6 million tonnes/year currently and its ethylene capacity to 1.22 million tonnes/year from 220,000 tonnes/year, 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.
In January, PetroChina reported that its oil and gas output in 2004 reached a record 917.9 million boe, a 3.1% rise on 2003's level.
Of the total output, crude oil accounted for 777.9 million bbl, up 0.4% for the year, while natural gas production rose 21.4% to 839.4 bcf.
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).
SCMP quoted China Oil News, which is sponsored by PetroChina's parent firm China National Petroleum Corp. (CNPC), as saying the Dushanzi project is "part of the nation's energy source diversification strategy" and "an important move to augment competitiveness by integrating oil refining and petrochemical production."
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 tonnes/year of crude oil to China when it comes on stream early next year, increasing to 20 million tonnes/year 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 $9.8 billion in investment was expected to go to the country's mineral resources sector in 2006, including $7.2 billion from other countries, and $12.7 billion will be invested in 2006, with $9.3 billion of that funded by foreign sources.
Total investment stood at around $7.7 billion dollars in 2004 and $6.8 billion in 2003.
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.
Meanwhile, Izmukhambetov told the meeting that Kazakhstan's forecast gas output will be 28.9 billion cu m (bcm) in 2006 and 40.34 bcm in 2008, up from 23.8 bcm in 2004.
He also said the country produced 14.4 bcm of marketable gas in 2004, which would grow to 21.6 bcm in 2008. In 2004, Kazakhstan exported 7 bcm of natural gas and expects to export as much as 9.8 bcm in 2008.
