Sinopec Maoming says wins approval to expand plant
Reuters BEIJING, Thursday Aug 28, 2008 – Maoming refinery, Sinopec’s second largest by output, said it won government approval earlier this month to expand crude capacity by nearly 90 percent, a refinery official said on Thursday.
The 270,000 barrels-per-day plant will add a new distillation unit of 240,000 bpd and other secondary units that are estimated to cost 4-5 billion yuan , said Cai Zhan, an official in the plant’s public relations department.
“When the upgrade would kick off or be completed or how much it would cost have not been finalised because there are still some detailed studies and designs that need to be done,” Cai said.
Facing nearly a full year of refining losses under soaring crude costs and state-set fuel price caps, Sinopec is likely to proceed with more caution in adding new refining capacity, a company advisor told Reuters last month.
The top refiner in Asia incurred 46 billion yuan of refining loss in the first half of this year, versus a 5.7 billion yuan refining profit a year earlier.
With heavy pressure on cash flow, Sinopec has decided to trim its 2008 investment plan by 8.5 billion yuan, including 8.2 billion yuan in capital expenditure, and company Chairman Su Shulin said on Tuesday the firm may cut or delay more projects if the cash flow position does not improve in the second half.
Separately, top Chinese offshore oil firm CNOOC plans to expand its first major refinery even though the 240,000-bpd plant has yet to start operation, aiming to solidify its position in the world’s second-largest oil market.