Kuwait Petroleum and Sinopec have announced plans for Guangdong refining plant.
Beijing has approved the $9 billion dollar oil refining and petrochemicals joint venture between China's state-owned Sinopec and Kuwait Petroleum Corporation. The refinery will be built in the southern coastal city of Zhanjiang, Guangdong province and will have a 300,000 barrels-per-day capacity, as well as a 1 million tons-per-year ethylene complex. The plant will under a 50-50 owernership agreement for both companies.
The project is one of the pillars of Kuwait Petroleum's 2030 expansion strategy, which Kuwaiti Oil Minister Mohammad al-Busari hopes will help promote cooperation between the two nations. Kuwait is the fourth largest exporter in the Organization of Petroleum Exporting Countries (OPEC and currently exports around 200,000 bpd to China, a figure which it hopes to increase to 500,000 bpd in the future.
The long-term venture is important for China as well, which imports 55% of its crude oil requirements. Though the plant has great potential, some experts are concerned that an influx of new refineries being built in Guangdong may delay proceedings and create surplus capacity.