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PetroChina Sichuan refinery ready to start after repeated delays -sources

Wednesday, 18 Dec 2013 | 2:14 AM ET

BEIJING, Dec 18 (Reuters) - PetroChina's $6 billion refinery and petrochemical complex in southwest China will be ready for trial production in weeks, two company officials said, more than a year later than originally touted due to repeated delays.

The start-up of the 200,000 barrels-per-day Sichuan facility is being closely watched as it is the first major refinery in China's landlocked southwest and will process crude from the remote Xinjiang region, as well as from Russia and Kazakhstan.

It will also be one of the two major new refineries the world's second's largest oil consumer is expected to bring online in 2014. The other is the 240,000-bpd Quanzhou refinery, with investment by state-run Sinochem Corp.

Quanzhou, in the southeastern province of Fujian, is expected to start in the first quarter of 2014, delayed from an original timeline of mid-2013.

"This time the (PetroChina) Pengzhou plant in Sichuan will be really ready for test runs," said one industry official with direct knowledge of the project.

A delay in adding some environmental facilities including a drainage system, which the local government has agreed to build, was the main reason for the latest postponement, said the official.

The refinery was last expected to start trial production in late October, according to company officials. That was after several delays including one as local residents expressed concerns over safety following an earthquake in Sichuan in April.

The delays have led to brimming inventories at the plant's crude storage units, the first official added.

Tighter government scrutiny and growing public awareness of environmental and safety standards have over the past few years contributed to a slowing in China's refinery expansions, following more rapid development since the mid-1990s.

Plans for a $13 billion refinery and petrochemical complex in east China - a joint investment by PetroChina, Royal Dutch Shell and Qatar Petroleum, have stalled over finding a suitable site.

The Sichuan plant has an affiliated petrochemical complex including an 800,000 tonne-per-year ethylene unit, which produces feedstock for making plastics and textiles. Officials did not specify if the petrochemical plant would start operating at the same time.

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