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MOSCOW (MRC) -- China's Sinopec Corp
has joined a group planning to build an oil refinery in Alberta, an enterprise
that would strengthen demand for the Canadian province's heavily discounted
crude, reported Reuters.
State-owned Sinopec,
formally known as China Petroleum & Chemical Corp, along with an Alberta
indigenous group, China State Construction Engineering Corp and Alberta
management company Teedrum, plan to build a refinery to process 167,000 barrels
per day of crude into gasoline and other products, the project's consulting firm
Stantec Inc said in a statement on Thursday.
The SinoCan Global refinery
would cost CD8.5 billion, with a financing plan still to be worked out, said
Teedrum President Ken Horn, who is leading the effort. Ownership has not been
determined.
The group hopes to receive regulatory approval from the
Alberta and Canadian governments within two years, he said in an interview on
Friday. Most of the refined products will be exported.
"It helps create
value for the bitumen," Horn said, referring to the tarry, semi-solid form of
Alberta's heavy crude. "Right now we ship most of that (crude) out of the
province. We should do a lot more to maximize the value of that
asset."
Most of Canada's crude is produced in landlocked Alberta, where
pipeline capacity has not expanded as rapidly as production. Resulting
bottlenecks have hindered transportation to U.S. refineries, steepening an
already deep price discount for the province's crude, which grew to a multi-year
high this week.
Sinopec's interest is encouraging news for a Canadian
sector that has seen foreign oil majors retreat over concerns about high
production costs and the oil sands' environmental toll.
China's
involvement would complement its existing Alberta investments, Horn said.
State-owned CNOOC Ltd bought energy producer Nexen in 2013.
If Sinopec
plans to ship refined products from Canada to China, it would likely move them
by rail to the Pacific Coast, since pipeline space is limited, said GMP
FirstEnergy analyst Michael Dunn. It may make more sense for China to import
Canadian crude and refine it domestically, he said.
As MRC informed earlier,
in April 2016, Russian petrochemical company SIBUR started talks
with shareholder Sinopec about investing in a planned gas chemical plant in
Russia's Far East. SIBUR plans to buy gas from fields which Russia's
Gazprom will develop in Eastern Siberia.
Sinopec Corp. is one of the
largest scale integrated energy and chemical company with upstream, midstream
and downstream operations. Its principal business includes: exploring,
developing, producing and trading crude oil and natural gas; producing, storing,
transporting and distributing and marketing petroleum products, petrochemical
products, synthetic fiber, fertilizer and other chemical products. Its refining
capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in
Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the
parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in
2012. |
