Shell pulls out of Sinopec-KPC refinery JV in China, doors open for others

Pursuant to its strategy to focus on the upstream process, Royal Dutch Shell has halted talks of co operating with China Petroleum and Chemical Corp. (Sinopec) and Kuwait Petroleum Corp. in a major refinery project in China. Shell has decided not to be part of the project which is a major downstream project, due to strategic considerations, thus offering an opportunity to other global players to join the venture. KPC and Sinopec Corp. have a memorandum of understanding to build a 300,000 bpd refinery and petrochemical complex in Guangdong province at an estimated cost of US$9 billion. The project, with capacity to produce one million metric tpa of ethylene is awaits formal nod of approval from the Chinese government. This decision by Shell will not affect plans to proceed with this project, slated for completion in 2014. Sinopec and KPI continue to hold 50% stake each. The incoming new partner will take a new percentage in the KPI stake. Kuwait will supply all the crude oil for the project.
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