China’s largest integrated oil company, PetroChina Company Ltd. (PTR), has started operations at the $4 billion Dushanzi refining and chemical complex in the Xinjiang province. The complex consists of a refinery and an ethylene plant, with a capacity of 10 million ton and 1 million ton a year, respectively.
The refinery, which processes high-sulfur crude oil, will increase the company’s total refining capacity of 2.58 million barrels per day (as of 2008). The company estimates that the project may generate approximately $8.8 billion in annual revenue.
Most of PetroChina’s crude oil and natural gas reserves and production-related assets are located in northeastern, northern, southwestern and northwestern China. With the start of this refinery complex, the company is able to import and refine crude oil in the west part of the country.
As per the Chinese government’s data, the country’s fuel demand may rise 4% in 2009. Despite the global downturn, China is expected to remain in growth mode, albeit at a slower rate. In fact, the current ongoing commodity rally is driven partly by growing indication of the resumption of robust Chinese growth. The country’s strong economic growth over the last few years has significantly increased its demand for oil, natural gas and chemicals.
This presents attractive opportunities for industry players that can meet the country’s fast-growing energy needs. Being one of the two Chinese integrated oil companies, PetroChina is well-positioned to capitalize on these favorable trends.
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