China National Offshore Oil Corp (CNOOC), the country's third largest oil producer, plans to invest 45 billion yuan to expand its new Huizhou oil refinery project in the southern Guangdong province, which is expected to come onstream this October.
The company signed a frame contract for the project on Aug 26 in Shenzhen, under which it will be expected to boost the capacity of the refinery to 22 million tons per year from the present 12 million during the 12th Five-Year Plan period (2011-15), the local media reported Thursday.
CNOOC will also add a new ethylene production project to the Huizhou refinery, which has the capacity of 1 million tons per year.
A CNOOC source yesterday confirmed the expansion, and said that it signifies the company's ongoing efforts to develop its downstream businesses of oil refinery and petrochemical products manufacturing.
"The Huizhou project will further increase the energy supply in the Pearl River Delta, one of China's economic powerhouses. CNOOC has been focusing on the region to develop our downstream business," said the source who did not want to be named.
Construction on the Huizhou project, which is expected to start production in October, began in late 2005.
It is CNOOC's first large oil refinery project in the country, with a total investment of over 20 billion yuan.
Next to the Huizhou project is the $4.2 billion CNOOC-Shell petrochemicals project. The core production facility of the 50-50 joint venture is the ethylene crack plant with annual capacity of 800,000 tons. The project started business operation in 2006.
Apart from these two giant projects, CNOOC is also planning for some downstream projects in the Yangtze River Delta and the Bohai Bay region, said the source from CNOOC.
The company has also quickened its pace in developing filling stations. Now CNOOC owns around 20 stations in Shanghai, three in Hangzhou and some 30 in Huizhou, the source said.
CNOOC's listed arm CNOOC Ltd said on Wednesday that its first-half net profit rose sharply by 89.3 percent year-on-year amid high oil price and solid operational performance.
Net profit recorded 27.54 billion yuan, or 0.62 yuan per share, the company said in its interim report.