CPC to send delegation to UAE to confirm investment in Kuokuang Petrochemical Co

07-Nov-05

State-run Chinese Petroleum Corp (CPC) will send a delegation to the United Arab Emirates (UAE) to reconfirm International Petroleum Investment Corporation's offer to invest 20% stake in the Kuokuang Petrochemical Co. The 1,200 hectare Kuokuang Petrochemical Processing Zone will have a refinery, a naptha cracker and 25 downstream petrochemical plants. Upon completion in 2014, the refinery will refine 300,000 bpd of crude and produce 1 million tpa of ethylene. Abu Dhabi based IPIC had planned to take a 20% stake in Kuokuang as part of its global expansion, but the move has been put on hold because plans for Kuokuang had not been finalized. After IPIC expressed interest in investing in the zone, CPC was mulling whether the Kuokuang Petrochemical Processing Zone should be built in Yunlin County or in closer proximity to raw materials in UAE. The company will have an initial investment of NT$400 billion (US$12 billion). Of that, 30% will come from shareholders and 70% from loans. Kuokuang is being formed by 6 shareholders with the state-run CPC holding a 43% stake. 4 of the 6 shareholders have signed a letter of intent to invest in Kuokuang. After the remaining two shareholders sign the letter next week, the shareholders will apply to the government asking that Kuokuang be established at the end of this month.