BT: PetroChina eyeing refinery in S'pore

Published March 4, 2008

PetroChina eyeing refinery in S'pore

Giant

China

outfit carrying out a feasibility study on the project: sources

By RONNIE LIM

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SINGAPORE

)

China

's PetroChina - the world's largest listed company by market capitalisation - is looking at building a world-scale refinery in

Singapore

, sources said. The project will easily run into billions of dollars.

The Chinese oil giant already has oil trading operations in the Republic - the third largest oil trading hub worldwide after New York and London .

'It is currently doing a feasibility study and doing due diligence on this... and so far the feedback has been positive,' one source said.

PetroChina,

China

's largest oil company, is looking at building a refinery 'of at least 400,000 to 500,000 barrels per day,' another source indicated. This will be comparable to the biggies here - ExxonMobil's 605,000 bpd refinery on

Jurong

Island

and Shell's 500,000 bpd one on Pulau Bukom.

'Given PetroChina's business profile, it makes sense for them to have an oil refinery in a global pricing hub like

Singapore

,' the source added.

The Chinese oil giant already has oil trading operations in the Republic - the third largest oil trading hub worldwide after

New York

and

London

.

It also has a 35 per cent stake (for which it paid US$160 million) in the brand-new S$750 million Universal Terminal - one of the biggest independent terminals worldwide - built by leading Singapore oil trader Hin Leong Trading. Industry circles earlier said that PetroChina's stake in the 2.28 million cubic metres

Singapore

tankfarm would boost its oil trading activities here. It will also allow

China

's largest oil company to hold stocks here to support the Chinese market. Having an oil refinery here would dovetail nicely with this strategy. PetroChina was interested in refining here in 2005-2006 when it was said to be considering BP's stake in the 290,000 bpd

Singapore

Refining Company.

Going by earlier estimates by Singapore Petroleum Company CEO Koh Ban Seng, who said that it would cost US$5 billion to build a moderately-complex 200,000 bpd refinery here given current high engineering, procurement and construction costs, a project of PetroChina's scale would cost considerably more.

But PetroChina's plan will certainly be welcomed by the Economic Development Board which wants to attract at least one more world-scale oil refinery here.

Singapore

's total oil refining capacity - including Singapore Refining Company's 290,000 bpd facility - has remained largely unchanged at 1.3 million bpd over the last decade, and its share of global capacity has fallen to 1.4 per cent from 2 per cent previously.

By comparison,

China

's share has grown to 8.1 per cent and

India

's to 3.4 per cent as new refineries are built there, the latest BP Statistical Review showed.

EDB's executive director of energy, chemicals and engineering services, Julian Ho had earlier indicated that apart from plant expansions by existing players here, there will be refining opportunities for national oil companies 'like the Chinese companies looking at international investments, and also others from the Middle East who want to capture a bit more value downstream beyond selling just crude.'

'There may also be independent traders who want to take on some refining assets,' he added.

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