Sinopec and Hebei Development and Reform Commission has signed a contract to build a petrochemical refinery base in Hebei Province. The complex will encompass an oil refinery with an annual processing capacity of 10 million tons and a 1 million ton ethylene unit.
Will this agreement jeopardize similar plans by the China National Petroleum Corp.?
CNPC had earlier announced plans to build a large oil refinery base in Caofeidian, in proximity to its recently discovered Nanbao Oilfield. This project awaits approval from the relevant government authorities. However, it is unlikely that both bases will be approved by the NDRC as two such similar developments in the one area would be a waste of resources. Both Sinopec and CNPC wish to incorporate crude oil reserve and import capabilities as well as oil processing and petrochemical operations in their bases. CNPC's project will offer the advantage of close proximity to the company's Nanbao Oilfield, resulting in reduced transportation costs.