CNOOC to invest $6.5 bln to expand Huizhou refinery

BEIJING, April 1 Tue Mar 31, 2009 11:53pm EDT

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BEIJING, April 1 (Reuters) - China offshore oil firm CNOOC has decided to invest 44.2 billion yuan ($6.5 billion) to almost double the capacity of its first major refinery in southern China, local media and a company official said on Wednesday.

CNOOC, parent of CNOOC Ltd (0883.HK), signed an investment contract with the Huizhou city government of Guangdong province on Tuesday aiming to bring annual crude processing capacity of its Huizhou plant to 22 million tonnes from 12 million tonnes by 2015, according to the Dongjiang Times, a local newspaper.

It will also add an ethylene complex with capacity of 1 million tonnes a year.

CNOOC started pumping crude oil into its newly-constructed 240,000 barrel-per-day (bpd) plant in Huizhou last month.

Company officials told Reuters that it would take about another 1-½ months to start up all its 16 processing facilities before the new refinery can enter normal operations.

A CNOOC official said that the Huizhou investment plan also needed approval from other central government agencies such as the National Development and Reform Commission before it can be fully kicked off.

China's state oil firms will add nearly 1 million bpd of new capacity by the end of this year with six plants, though more than half of them will start up in the second half, a Reuters survey found in February. [ID:nPEK163730]

(Reporting by Eadie Chen, Editing by Jonathan Hopfner) (eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net))

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