Russia, China to invest 5.0billion dollars in refinery: aide

21st September 2010, Comments 0 comments

Russia and China agreed on Tuesday to invest five billion dollars in the construction of a refinery in China as Moscow seeks to diversify its energy clients, an aide to Russian deputy prime minister Igor Sechin said.

Rosneft, Russia's biggest producer of crude, and China National Petroleum Corporation (CNPC) agreed earlier in the day to build a new, 13-million-tonne per year refinery in Tianjin, a port city near Beijing, Rosneft said

"Investments in the project will total five billion dollars (3.8 billion euros)," a Sechin aide told AFP from Tianjin.

Russia will own 49 percent in the project and China 51 percent, he said.

"This is just the construction of the plant," he said, adding that under the second phase of the project the two companies planned to build at least 500 petrol stations in China.

Sechin, who is in China ahead of President Dmitry Medvedev's visit there on September 26-28, is in talks with Chinese officials and attended a ground-laying ceremony for the new refinery in Tianjin earlier in the day.

Russia will supply 70 percent of the crude to the plant, while the remaining 30 percent would come from the Middle East, Sechin's aide said, speaking on condition anonymity in line with government policy.

Rosneft said in a statement that the plant would be completed in 2015, while Sechin's aide said a feasibility study for the plant would be ready within the next six months.

It will take another two years to build the plant once the feasibility study is done, he added.

In recent years, Moscow and Beijing have intensified energy cooperation as Russia is keen to diversify its client base beyond its traditional European consumers and China is seeking to secure energy resources to fuel its growing economy.

Rosneft president Eduard Khudainatov, speaking at the ground-breaking ceremony, called the refinery a "landmark in the history of Russian-Chinese relations."

"This is another practical step in the development of cooperation between the largest oil companies of our two countries," Rosneft quoted him as saying.

Travelling to China at the invitation of Chinese President Hu Jintao, Medvedev will visit Dalian, Beijing and Shanghai, the Kremlin said.

© 2010 AFP

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