CNPC and Shell get the go ahead to embark on large refining project in Zhejiang Province
China's National Development and Reform Commission has approved the deal between Shell and PetroChina to start work on a refinery in Taizhou, Zhejiang. The total investment in the project is CYN80bn ($12bn Zhejiang's largest project since the Republic of China was founded in 1949.
Once completed, the Taizhou petrochemical project is forecast to generate CYN100bn ($15bn) in annual sales, with a further CYN300bn ($46bn) to be made by downstream industries. The project will refine 20 million tons of oil per year as well as annual production of 1.2 million tons of ethylene and 300,000 tons of crude storage. The crude oil will be imported from Qatar, thanks to Shell's longstanding ties with the region.
The deal only strengthens the relationship between the two giants, who are already involved in several high-profile projects together including the Changbei gas field project, the acquisition of Arrow Energy and a joint venture oil and gas well drilling company, for which they have yet to receive government approval.