Lamma Island could become a large-scale oil refinery base if a HK$60 billion project proposed by an unknown group of investors is confirmed. A second option, Lung Kwu Tan in the western New Territories, was the preferred location for the project because of lower construction costs and its proximity to the Pearl River Delta, Hong Kong Oil and Petrochemical Co (OPC) said. The company said it was talking to government authorities about a plan to build and operate liquefied petroleum gas (LPG) and petrol-filling stations, as well as a bulk storage terminal, oil refinery and power-generation facilities. Total investment would come to between HK$40 billion and HK$60 billion and would offer 20,000 job opportunities in construction and infrastructure, management and operations, the company said. The initial investment of HK$2 billion would be shouldered by OPC's private investors from Singapore, Malaysia, Hong Kong and the mainland. But the management refused to reveal details of the investors' background. OPC adviser Y.C. Lim said it would not rule out raising capital in the market to help fund the project. Company chairman Yeo Kee Ping said the firm had signed memoranda of understanding with a number of strategic partners, including Sinopec and PetroChina. But PetroChina spokesman Mao Zefeng said yesterday: 'We have not been notified of any memoranda of understanding with OPC for the proposed investment programme, but we cannot verify at the moment whether there is any technical support or co-operation on our third and fourth-tier business.' A company source from Sinopec also said he did not know of any co-operation plan on a corporate level with OPC, but said he would 'try to find out what had happened'. The project, which would take three to seven years to complete, would be divided into two phases, OPC said. In phase one, 10 to 15 LPG and petrol-filling stations would be opened in Hong Kong in a year's time. The second phase, to be completed by 2008, would see the construction of large centralised storage facilities, an oil refinery with a capacity of more than 100,000 barrels, power generation facilities and downstream industries. 'We are talking with the government. They are supportive to the project because it's good for Hong Kong,' Mr Lim said. The Economic Development and Labour Bureau said it welcomed more players to the energy sector to enhance the competitive environment, but it had yet to receive a proposal from the firm. 'We will study carefully any proposal that is put forward, in the light of existing policies and procedures,' it said. Invest Hong Kong also released a statement saying it was its practice not to comment on whether individual projects were under consideration. Raymond Wong, a spokesman at ExxonMobil, one of Hong Kong's largest petrol station operators, said OPC had approached the firm about the project. 'We have no commitment in the project yet and would like to know the government's reaction,' he said.