CNPC closer to Sudan deal

The mainland oil giant sets its sights on a US$500m venture to more than double a refinery's output

China National Petroleum Corp (CNPC) is close to clinching a US$500 million investment deal in Sudan, giving another boost to its investment portfolio in the war-torn African country.

The oil giant is expected to ink a deal in the coming months to invest in a 50:50 joint venture to more than double the capacity of a refinery and build an oil pipeline, China Daily quoted Sudan's ambassador to China, Mirghani Mohamed Salih, as saying.

CNPC - the parent of China's largest oil producer, PetroChina - and the Sudanese government will each spend US$150 million to expand throughput of the Khartoum refinery from 50,000 barrels per day (bpd) to 90,000 bpd in a year.

The remainder of the investment will go towards the construction of a 750km oil pipeline linking an oilfield to the refinery and to a port for exports.

CNPC and the Sudanese government formed the refinery joint venture in 1997, and CNPC has since acquired stakes in three oil fields in Sudan, which has been embroiled in a civil war with southern rebels for more than 20 years.

The refinery sources oil from a CNPC-led oil project consortium - with a Malaysian and a Canadian partner - in which CNPC has a 40 per cent stake. The project produces about 330,000 bpd.