KARACHI, May 22 -- China National Oil & Gas Exploration Development Corp. (CNOGEDC), a subsidiary of China National Petroleum Corp. (CNPC), is showing a strong interest in constructing a $600 million refining unit at Karachi, Pakistan, to process its Sudan crude oil.
The unit would be a possible alternative to the $1.1 billion Iran-Pak refinery project, which has been planned since 1996 but seems to be in limbo, having taken only small steps forward since its inception.
CNOGEDC, looking at several other new avenues for potential downstream investment, also is investigating the possibility of acquiring an equity stake in Iran-Pak, should it move forward, or of setting up an independent oil refining unit at a feasible location in the country's financial hub.
Crude oil for the refinery would be imported from the $2.3 billion Greater Nile oil project (GNOP) currently under development in southern Sudan. CNOGEDC, which has a 40% interest in GNOP, is partners with operator Talisman Energy Inc., Calgary, 25%, as well as the state oil companies of Malaysia and Sudan, which between them hold 35%.
Talisman said in March that crude production tagged for export from the six currently producing GNOP fields averaged 213,028 b/d in 2001, and several other GNOP fields are also scheduled for development (OGJ Online, November 06, 2001).
CNOGEDC has a share of 60,000 b/d of GNOP production for export and is seeking a suitable location for refining it. In selecting Karachi as a potential refinery site, CNOGEDC wants the advantage of the coastal city's port facilities, which can also be used for exporting naphtha to China—a country with a high naphtha demand for its plastics industry.
CNOGEDC also is studying the petroleum products market in Pakistan with an eye to sales there. A company delegation currently is on tour to determine the extent of that market and to investigate other opportunities for investment in Pakistan.