SK Energy drops China crude unit plan-paper

SEOUL, Oct 27 (Reuters) - South Korea's top refiner SK Energy (096770.KS) has dropped a plan to build a crude oil processing unit in China due to government price regulations, a local newspaper reported on Monday.

SK Energy, which has a 35 percent stake in a naphtha unit project with China's Sinopec Corp (0386.HK), will build a wind power plant instead of the crude distillation unit (CDU), the Maeil Business newspaper said, citing SK Energy officials in China.

"The reason we participated in the stake in Wuhan naphtha unit was because naphtha is a product that is less price-regulated (by the government)," Kim Tae-jin, head of SK China was quoted as saying.

The Chinese government controlls oil product prices sold by local refiners, forcing state-run Sinopec to post profit losses for several years, the newspaper said.

SK Energy was not immediately available for comment.

The wind power plant will be built in one or two regions in China, led by SK E&S, a sister company of SK Energy. (Reporting by Angela Moon)