Total joins Kuwait Petroleum Corp. (KPC) represented by its wholly-owned subsidiaries Kuwait Petroleum International (KPI) and Petrochemicals Industries Co. (PIC) in the Joined Venture with Sinopec for this $9 billion “Refinery” and “Petrochemical” complex at Zhanjiang, in China’s southern Guangdong province.
In fact Total took the opportunity to substitute Shell which had pulled out of this project last December. KPC‘s subsidiary Kuwait Petroleum International (KPI) and Sinopec signed an agreement in 2010 where Sinopec will hold 50% of the stake, KPC 30%, while Total will take the remainder.
In March this project received the formal approval from The National Development and Reform Commission (NDRC), China’s top economic planner. With NDRC’s initial approval in 2006, the refinery was originally planned for the Nansha district of provincial capital Guangzhou, but amid growing concern over the environment impact on the densely populated area, Kuwait and China agreed in May 2009 to relocate the project to much less crowded Donghai Island of Zhanjiang City.
With crude feedstock coming from Kuwait, the project is estimated to cost $9 billion and should include:
- A 15 million t/y (300,000 b/d) refinery
- A 1 million t/y ethylene plant
- All related utilities, as well as support facilities.
The Donghai Island of Zhanjiang City provides technical advantages, such as availability of deep water for VLCCs, good environmental conditions and excellent land condition, as well as economical attractiveness including tax incentives.
In this project, KPC settles a long term partnership with China, China secures its energy supply and Total expands in growth markets, based on competitive and integrated platforms.
The completion is due in 2015.
