Three shareholders are inconsistent 80 billion Taizhou petrochemical project Dystocia

September 11, foreign reports said that the construction of the 5-year-old Taizhou Refining and integration project faced shelving, "the reason or the high level of PetroChina was investigated and lost political support caused by the project is also subject to local residents against." "Taizhou Refining Integration project is 2008 years of PetroChina, Shell and Qatar Oil tripartite plan to jointly invest 80 billion yuan construction of large-scale petrochemical projects." It includes 20 million tons/year refining capacity, 1.2 million tons/year ethylene production capacity, such as a series of petrochemical production capacity, PetroChina deep East China Petrochemical market is an important bridgehead. The project to build the news after exposure, that is, Sinopec and the people of Taizhou strong sniper, to 2012 joint venture has formally signed the joint venture principle agreement. Taizhou municipal officials firmly denied the news that the project was on hold; Shell China said the project feasibility study was still under way; PetroChina said it was not responding to market rumours. There are Sinopec Zhejiang people said: "China's overcapacity has become an indisputable fact, PetroChina is facing the pressure to cut spending, [now PetroChina] give up the project I am not surprised." He pointed out that the construction and operation cost of the Taizhou refining and integration project had exceeded the initial expectations, while the domestic oil products, especially the diesel market, already had oversupply phenomenon, "from the profit-return angle, who will invest?" "Taizhou Petrochemical Project Dystocia According to the plan of PetroChina, project total investment 80 billion yuan, from PetroChina, Shell, Qatar Oil will according to 51:24.5:24.5 proportion of common investment." "Oil sources from Qatar Oil and shell share oil in Qatar". After the project is put into production, it will have 20 million tons/year refining capacity and 1.2 million tons/year ethylene capacity, "and strive to have a gas station terminal network in Zhejiang." "The person said. Zhejiang is the traditional territory of Sinopec, 2006 Sinopec is determined to speed up the renovation of its Zhenhai refining and expansion planning, planning to Zhenhai refinery refining capacity of the 23 million tons/year to expand to 38 million-43 million tons/year, and new 1 million-2 million tons/year ethylene production capacity. "Taizhou Project is a new project, land requisition, oil source, equity ratio and so on, the need for tripartite shareholder coordination, difficult to imagine; by contrast, the renovation and expansion of Zhenhai refining is much easier. The person familiar with the matter recalls. After the outbreak of the financial crisis in the United States, Zhenhai refinery benefited from the Chinese government's economic stimulus policy, Sinopec invested more than 20 billion yuan, started the Zhenhai refining the first 1 million tons/year ethylene capacity Construction, 2010 the project has been officially put into production. At this point, PetroChina and Shell, Qatar Oil is also difficult to cooperate in the details of coordination. Until January 2012, the three parties finally signed the joint venture principle agreement. "There is a tug on the outside, which is unbearable," he said. "The person said helplessly. However, the whole external environment has undergone great changes. 2007, Xiamen 105 CPPCC members signed a joint petition against the local investment in the construction of PX chemical projects, followed by the national netizens on the PX and other chemical projects hot. In the past 2012 years, Sinopec started construction of Zhenhai Refining and extension project (15 million tons/refining capacity and the second 1.2 million tons/year ethylene production capacity), the project is located in Ningbo Zhenhai District citizens of the community against; in October, the Zhenhai District government announced that the project is in the early stage, the next step will fully listen to and absorb the public opinion on the project construction. In this case, PetroChina and other start-up Taizhou integration project will be more difficult. China Refining capacity surplus? "Foreign caution is not unreasonable, China's market environment changes too quickly." "Executives at multinational oil companies think. It is understood that the Sino-card and Shell proposed the integration of Taizhou Refining project motion, began around 2006. At that time, Sinopec, Exxon Mobil and Saudi Aramco jointly built Fujian refining and integration project will be put into production, its cooperation model and project prospects are widely favored in the industry. However, in the past 2006 years, China's new and expanded refining and chemical production capacity is very fast, 2006 has been put into production of new refining capacity of more than 50 million tons, is planning a new refining capacity of tens of millions of tons, ethylene production capacity is increased nearly one times. Along with the domestic oil market pattern has undergone a great change: 2008 years later, has been plagued the Chinese "oil shortage" quickly disappeared, but also to the industry's concern is that at the end of 2008 and the first half of 2013, the country's largest supplier of oil products Sinopec had to sell oil to Southeast Asia two times. "Only when low-cost resources are depleted and market supply and demand are rebalanced, will the end price rise." "says Zhongjian, chief expert at the Barter Research Center. Even in chemical capacity, such as ethylene, the supply and demand structure of the Chinese market has changed dramatically over the past few years – rapid growth in ethylene production has quickly filled new market demand, but because some downstream low-end production bases are shifting to cheaper markets such as Southeast Asia, Upstream capacity in the past responsible for supplying their raw materials is at risk of losing the existing market. In this case, Qatar Oil and Shell are apparently unwilling to invest in this predictable price hand-to-hand combat. PetroChina to reduce the problem even for PetroChina, whether to adhere to the start of Taizhou refining integration project also faces a dilemma: on the one hand, Taizhou project for the company in the national market layout has an important strategic significance, must be built; On the other hand, PetroChina has been plotting to reduce its efficiency, and stressed that the upstream mining investment accounted for 70% of the total investment, and how much financial resources can be used to support the construction of Taizhou project? Zhejiang economy has been ranked highest in the domestic provinces, but before this is the traditional territory of Sinopec, the local oil retail market share of more than 80% in the Sinopec bag, 70% terminal gas stations also hang Sinopec's "logo" to attract vehicles. "PetroChina has been snooping around Zhejiang and has tried to hit Sinopec's share with low-cost oil products, but because it does not have a large oil depot and no refining capacity, the Low-cost strategy has little effect." "The above Sinopec Zhejiang Analysis said:" If it has a refinery here, there are several large oil depots, not only Zhejiang, is the entire East China, we offset its impact areWill pay a very high price. This is precisely the reason why Sinopec was anxious to speed up the expansion of Zhenhai refining and reconstruction project. But this year, because of the central bank tightening, the domestic banks not only the corresponding increase in lending rates, but also a lot of previously thought to be "quality loans" of the state-owned loans to re-examine, "some projects even to be sent back to the site for verification." From the two quarter onwards, PetroChina headquarters has made clear that this year, the company to reduce the cost of 18 billion yuan, and to secure upstream exploration and gas pipeline project expenditure, and will focus on refining and sales of the plate.