Tianjin oil refinery project with Rosneft proceeding on schedule - CNPC
BEIJING. May 14 (Interfax) - The project to build an oil refinery in Tianjin, China, being carried out by Rosneft and China National Petroleum Corporation (CNPC) is proceeding on schedule, said Zhang Xin, the Chinese company's head of external communications.
"Russia and China are to make the final investment decision no later than 2017," he said.
"In accordance with the agreement between the shareholders in the Russian-Chinese petrochemical joint venture, an international consulting company was hired to prepare the feasibility study for the refinery. It has completed that job," he said.
The feasibility is now being examined by the shareholders, "who will use it as the basis for selecting the optimal configuration for the enterprise."
Once the shareholders approve the feasibility study, "the sides will draw up other proposals, which must then be approved by government bodies," he said.
Rosneft and CNPC expect to start up operation of the refinery no later than the end of 2020.
Rosneft will deliver crude to the refinery under a long-term prepayment contract. The refinery will have capacity to process 16 million tonnes a year, of which Rosneft will deliver 9.1 million tonnes. Rosneft President Igor Sechin has said the company will also deliver oil "for the partner as well."
The construction project is expected to cost $5 billion. The Vostok Petrochemicals joint venture (49% owned by Rosneft and 51% by CNPC) signed an agreement on the feasibility study for construction of the Tianjin refinery in 2010.
A groundbreaking was held the same year. However, construction was never started because of the poor economics of the project. In 2012, Russia and China began negotiations to extend a number of preferences to the project, including the right to independently import oil and export products, and sell oil products on the Chinese market, among other things. In April 2013, Vostok Petrochemicals secured the right to export oil products and petrochemicals.
