CNOOC plans expansion of newly-bought refinery
BEIJING, Sept 18 (Reuters) - China's top offshore oil company CNOOC CEO.HK (0883.HK) plans to spend 7 billion yuan ($1.02 billion) to add an extra 5 million tonnes of refining capacity at a plant it has bought in eastern China, the refiner said.
The investment will be spread over three years, and the expansion will be backed by a flow of crude oil from the wells of listed unit CNOOC Ltd CEO.HK(0883.HK) in the nearby Bohai Bay, Shandong Haihua Co Ltd (000822.SZ), said in a statement posted on its website (www.haihua.com.cn).
Current refining capacity is 3 million tonnes, according to Chinese media, so CNOOC plans to more than double its size.
The acquisition of Huihua, which produces chemicals as well as oil products, gives CNOOC its first strong toehold in a leading regional oil market that is home to many independent Chinese refiners.
CNOOC, aiming to become an integrated oil firm in the world's largest oil market after the United States, is scheduled to start operating its first major refinery located in southern Guangdong province this autumn to meet booming local demand.
The parent of CNOOC Ltd (CEO.N) has also been eager to enter northern coastal markets, including Shandong and Hebei, that are close to its major oil-producing fields in the Bohai Bay.
It signed a framework deal with the Shandong government earlier this year to boost oil and gas cooperation in areas ranging from refining to construction of ports, storage tanks and gas pipelines, as well as a liquefied natural gas project.
Last year CNOOC also bought a small private fuel and petrochemical producer in Hebei and intends to expand it into a 200,000 bpd refinery.
($1=6.838 Yuan) (Reporting by Emma Graham-Harrison, editing by Anthony Barker)
