PetroChina and Rosneft nearing deal on 60b yuan refinery tie-up

A much-awaited oil refinery joint venture between the mainland and Russia's largest oil producer is expected to move a big step forward next month when the parties seal an agreement on the 60 billion yuan (HK$68.26 billion) project in Tianjin.

State-owned PetroChina and Rosneft of Russia planned to sign the contract for the 51-49 joint venture, which will refine up to 15 million tonnes of crude oil annually at the rapidly developing Binhai New District, said Liu Changbin, a spokesman for Tianjin Harbour Industrial Park.

The project, to be developed in phases, would be one of the biggest investments in the oil and petrochemicals-oriented industrial park inside Binhai, Mr Liu said yesterday.

The oil refinery development would not only feed an energy-hungry nation, but also fuel the future growth of Binhai, an emerging economic, financial, and hi-tech zone in the Bohai region, he said. 'The pair will sign a contract next month,' Mr Liu said. 'It is one of the two 60 billion yuan oil and petrochemical projects in the industrial park.'

The other project he referred to is a 60 billion yuan investment by China Petroleum & Chemical Corp (Sinopec) that will produce about 500,000 tonnes of ethylene, a petrochemical used widely to manufacture moulds, car body parts and toys.

Construction of the PetroChina and Sinopec projects is not expected to begin until next year as groundwork for the sites is still under way.