This would be the first joint venture (JV) refinery project between PetroChina and Sinopec. The actual size of the refinery or investment costs have not been pinned down but officials expected the capacity to be around 2,00,000 barrel per day (bpd) or larger and cost 12-13 billion-yuan to build.
It will be JV between the two companies, possible a 50:50 firm, said a senior official with Sinopec Corp, Asias largest refiner. It was not immediately clear whether Sinopec Group, the parent company, or the listed Sinopec Corp would be the investor.
PetroChina and Sinopec had each planned to erect a 1,60,000 bpd refinery in Guangxi province by 2010, vying for the rapidly growing market in the southwest, neighbouring Vietnam, where there are no major refineries.
But in a recent government work conference mapping out refinery expansions for 2006-2010, the powerful economic planner, the National Development & Reform Commission, ruled out such competing investments and called for consolidating the plans into one.
The two majors have been vying since 1998 for retail market share in the worlds second-largest oil market and one of the fastest expanding.
The two combined control nearly 90% of the 6.6 million bpd market.