Taiwan says Kanematsu involved in Brunei refinery
Taiwan says Kanematsu involved in Brunei refinery
TAIPEI (Reuter): Taiwan monopoly Chinese Petroleum Corp said
yesterday it would form a joint venture with Japan's Kanematsu
Corp and the Brunei government to build Brunei's second oil
refinery.
"Kanematsu is also in the project," a Chinese Petroleum
official told Reuters by telephone.
Industry sources in Taipei said Kanematsu would build the
proposed US$1 billion refinery complex, which officials say will
have daily production capacity of 60,000 barrels.
Chinese Petroleum Corp, a state-run company, would sign a
memorandum of understanding with Brunei's state petroleum bureau
on July 23 to build the refinery plant, company officials said.
Signing for Chinese Petroleum would be its chairman, Lee Shu-
chiu, the company said.
"The chairman (Lee) will visit our Singapore office on July 17
and go to Brunei to sign the refinery memorandum on July 23," a
senior Chinese Petroleum official told Reuters by telephone.
Once the memorandum is signed, Chinese Petroleum and Kanematsu
will have 18 months to complete a feasibility study, after which
a letter of intent would be signed and the start of construction
could be authorized, the official said.
There were no estimates as to when the refinery might be
completed and enter production.
Chinese Petroleum officials have estimated the joint-venture
project was worth US$1 billion, but declined to give details.
Chinese Petroleum officials said the integrated chemical
complex, once completed, would use Bruneian light sweet crude to
produce 420,000 tons of p-xylene a year and 200,000 tons of
benzene a year.
The refinery's output would be earmarked mainly for export.
Oil-rich Brunei, a southeast Asian sultanate of 270,000 people
that shares the island of Borneo with Malaysia and Indonesia, has
only one small refinery with a daily capacity of just 9,000
barrels.
That plant is operated by Brunei Shell Petroleum Co Bhd, an
equally owned joint venture between Royal/Dutch Shell and the
Brunei government.
In May, Brunei's Oil and Gas Agency signed a letter of intent
with German state-owned engineering firm IAB to build a 160,000
barrel-per-day refinery at cost of 2.6 billion marks (US$1.5
billion).
IAB has said a feasibility study for the project would be
completed by the end of 1997 and construction would take four and
a half years.
Chinese Petroleum said its project with Kanematsu was not
related to the German project.
In 1996, Brunei produced about 165,000 barrels a day of crude
and has proven reserves of 1.4 billion barrels.