PetroChina Starts Work on $1.2 Billion Oil Refinery in China

By Winnie Zhu

Sept. 22 (Bloomberg) -- PetroChina Co., the nation's second-largest oil refiner, started construction of an 8.2 billion-yuan ($1.2 billion) oil refinery in western China's Ningxia province to tap rising demand.

The refinery will process 5 million metric tons of crude a year into products including 1.7 million tons of gasoline, 2.38 million tons of diesel and 210,000 tons of liquefied petroleum gas, parent China National Petroleum Corp. said in a statement in its newsletter today.

PetroChina and bigger rival China Petrochemical Corp. are expanding to meet rising fuel demand from the world's fastest- growing major economy. The nation's oil refiners will be able to process 460 million tons of crude a year, or 24 percent more by 2010, Sinopec Group, as China Petrochemical is known, said in April.

The state oil refiner will build a 5 million-ton-a-year crude distillation unit, 2.6 million-ton-a-year catalytic cracker and a 900,000 ton reformer at the plant, it said today. The project will be completed by the end of 2010.

To contact the reporter of this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net.