Kuwait's refinery project well underway, says Chinese mayor

09/03/2012 08:33 AST

Construction of mammoth refinery and steel projects involving Kuwait in the southern Chinese city of Zhanjiang are well underway, its mayor has said, state-run media reported Thursday.

"The ground-breaking ceremony was held in November, and the joint venture between Kuwait Petroleum Corporation (KPC) and Sinopec will be registered soon," Zhanjiang Mayor Wang Zhongbing told the China Daily.

Construction of the main body of the 59 billion Chinese yuan (9.3 billion US dollars) Sino-Kuwaiti project will start in June, the newspaper said.

The refinery and petrochemical project is designed to process 300,000 barrels per day of crude oil and turn out one million tons of ethylene annually. KPC will be the sole supplier of crude oil to the world-class integrated complex. In addition to Sino-Kuwaiti refinery and petrochemical project, the 63.5 billion yuan ($10.1 billion) iron and steel plant, owned by China's major steel company, is under construction in the coastal city.

"The two projects, both expected to go into operation in 2015, will inject a new vitality for the emergence of Zhanjiang in five years," Wang was quoted as saying.

The gross domestic product (GDP) of Zhanjiang is expected to expand by at least 15 percent annually, to reach 400 billion yuan ($63.3 billion) in 2016. The city plans to allocate five billion yuan ($792 million) to invest in each of the two projects this year. When the projects and their upstream and downstream industries go into full swing, more than 200,000 new jobs will be available in the city, according to Wang.

Kuwait became the second Arab oil producer to construct a refinery in China after Saudi Arabia, which finally put a refining and petrochemical joint venture into operations in 2009 in neighboring Fujian Province. The project in Zhanjiang is in line with KPC's strategy to invest in the growing energy markets and maximize the value-added benefits of the Kuwaiti crude.

KUNA