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Lack of site delays US$13b project
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Plans for a US$13 billion refinery and petrochemical complex in east China have stalled over finding a suitable site for the plant, which could face long-term delays, industry and government officials have said.
The PetroChina-led project, in partnership with Royal Dutch Shell and Qatar Petroleum, also faces competition from petrochemicals using US gas as feedstock, a change of strategy from PetroChina and opposition from locals.
The project partners began feasibility studies about 14 months ago in a bid to build the 400,000 barrels per day refinery and 1.2 million tons a year ethylene complex in the coastal city of Taizhou in Zhejiang Province.
It would be the single largest investment in the refining and petrochemicals sector for PetroChina, Asia’s largest oil and gas producer, and a base for it to expand in south China, which is a stronghold of rival Sinopec.
“The (Taizhou) project is on hold,” said an industry official familiar with the project status, pointing to the need for a massive landfill project.
Finding a suitable site strong enough to erect the massive plant has become a major headache for the partners.
Taizhou authorities have proposed filling in an area that encompasses six mini isles, but the work would cost about 10 billion yuan (US$1.6 billion), about an eighth of the total project cost, said a Chinese executive involved in this landfill project.
A local official said the partners had failed to come to a site decision after nearly two years of research and surveying land.
“The best land has long been taken by companies like Sinopec ... If (companies) are keen to capture the local market, they will need to pay a higher price now than before,” said the official.
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