CHINA Petroleum and Chemical Corp, better known as Sinopec, and Kuwait Petroleum Corp began construction on their 59 billion yuan (US$9.3 billion) joint venture petrochemical project in south China's Guangdong Province yesterday.

The equally-owned project, in the port city of Zhanjiang, will include a 15-million-ton-a-year refinery and a 1-million-ton-a-year ethylene plant, Sinopec said in a statement yesterday. It's expected to start operation in 2015.

China is expanding its refining capacity to meet rising fuel demand, and has brought in some foreign partners in part because they can help secure crude oil supplies. The nation is also building more plants for ethylene, the key petrochemical building block, to cut reliance on imports.

Sinopec, Asia's largest refiner, is operating a US$5 billion refining and petrochemical complex joint venture in south China's Fujian Province with Saudi Aramco and Exxon Mobil Corp.

The Zhanjiang project is one of the largest Sino-foreign petrochemical projects and also by far the largest cooperation project between China and Kuwait. The project won approval from the National Development and Reform Commission, China's top planner, in March after years of talks.

The Zhanjiang refinery will churn out gasoline meeting the Euro V emission standard and diesel to the Euro IV standard, Sinopec said.

Sinopec shares fell 1.6 percent to 7.23 yuan in Shanghai yesterday.

Source:shanghaidaily