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Oil firms to build refinery in 2010

CHINA National Petroleum Corp and Russian partner OAO Rosneft plan to start building a 21.1-billion-yuan (US$3 billion) refinery project in Tianjin next year, the local government said.

The two companies first agreed to build the refinery, with a capacity of 10 million tons a year, or 200,000 barrels a day, and undertake a fuel retailing business in China in March 2006 during a visit by former Russian President Vladimir Putin to Beijing.

The companies aim to secure government approval for the project by the end of the year and complete construction by 2012, said a statement on the Website of the Tianjin municipal government.

China is planning large-scale refining projects to meet future demand although there was an oversupply in capacity due to the economic slowdown last year when it processed 342 million tons of crude out of an estimated capacity of 396 million tons.

China targets annual refining capacity of 440 million tons by 2011, CNPC said last month, citing a three-year state energy plan. China is phasing out inefficient refiners and plans stockpiles of refined fuel.

The government would also promote joint-venture refinery projects involving firms from Venezuela, Qatar and Russia to ensure a stable crude supply, CNPC has said.

China agreed last month to lend US$25 billion to Rosneft, an oil major, and OAO Transneft, Russia's main pipeline operator, in return for 20 years of oil supplies totaling 300 million tons.


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