US, WASHINGTON (ORDO NEWS) — China is preparing to revive a $ 20 billion petrochemical project in eastern Shandong as part of efforts to increase infrastructure spending to support an economy struggling with the effects of the coronavirus pandemic, two sources said.
An oil refinery project with a production volume of 400 thousand barrels per day and an ethylene plant with a capacity of 3 million tons per year in Yantai, Shandong Province, which is the center of independent oil refineries, was proposed several years ago, but its approval was slowed down due to China’s struggle with excess processing facilities.
China’s state planner, the National Development and Reform Commission (NDRC), issued initial project approval, allowing Shandong to begin construction planning, sources said.
A spokesman for the project, Shandong Yulong Petrochemical, did not immediately comment on the information. NDRC did not immediately respond to a Reuters request for comment.
The Shandong Nanshan Group, a private Yantai-based aluminum smelter, will be a leading investor in a venture worth nearly 140 billion yuan ($ 20 billion), while other investors include the Wanhua Chemical Group and the government of Shandong, one source said.
Two sources refused to comment on the situation, as they are not authorized to communicate with the media.
The project could help reduce imports of petrochemical products to China, but it could probably worsen the situation with an excess of oil products in the country.
The Shandong oil refining sector has become less competitive in recent years after the launch of large integrated petrochemical projects.
The Yulong project will be the latest addition to the recent wave of petrochemical investments in China, led by the private sector and attracting global companies such as BASF and Exxon Mobil to build complexes in the world’s largest petrochemical consumer and importer.
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