KPC is now ready to sell stake in $9 billion refinery in Guangdong province.
After lengthy negotiations with international oil majors, Kuwait Petroleum Corp (KPC) has reached an agreement with France's Total to become a partner in a Sino-Kuwaiti refinery joint venture. The deal will involve KPC's international arm, Kuwait Petroleum International, selling 20% of its 50% stake in a Guangdong refinery complex.
State-owned oil giant Sinopec signed an agreement to build the complex over two years ago, but has been waiting on permission from the National Development and Reform Commission (NDRC) to start building.
According to the Kuwaiti Minister of Oil, Mohammad al-Baseeri, the project should be operational in 2014 or 2015, meaning a slight delay from the proposed deadline of 2013, due in part to Shell's withdrawing from negotiations.
The refinery will be built in the southern coastal city of Zhanjiang, Guangdong province, and will have a 300,000 barrels-per-day capacity, which should rise to 500,000 bpd two years later. A petrochemical plant with a one million tons-per-year ethylene capacity is also scheduled to be built.
The joint venture is significant for Kuwait, currently China's fourth largest supplier of oil behind Saudi Arabia, Angola and Iran, exporting around 178,000 bpd to the energy-hungry nation. Despite a significant drop in exports last November, December sales surged 58.9% to around 202,000 bpd as Chinese energy demand continues to soar.