SINGAPORE - China's state planner has given initial approval for a $20 billion refinery and petrochemical project to be built in Shandong province, the country's hub for independent oil refineries, said two persons with knowledge of the matter.
China's National Development & Reform Commission (NDRC) gave a greenlight on Monday for the Shandong provincial government to start planning a 400,000 barrel-per-day (bpd) refinery and 3 million tonne-per-year ethylene plant in Yantai, said the two China-based industry sources.
The project in the eastern Chinese province was first proposed several years ago, but it wasn't activated because of China's struggles with excess refining capacity. It was revived after Beijing dialled up infrastructure spending this year to bolster an economy reeling from the coronavirus pandemic.
The project could help cut China's petrochemical imports. Shandong's refining sector has become less competitive in recent years after the start-up of large integrated petrochemical projects like Hengli Petrochemical's Dalian plant and Zhejiang Petrochemical Corp's Zhoushan complex.
Shandong Yulong Petrochemical, operator of the mega venture, plans to spend nearly 140 billion yuan ($20 billion) for the complex, said one of the sources.
Investors in the project include private smelter Shandong Nanshan Group and the Shandong provincial government.
The sources declined to be named as they are not authorized to speak to the media.
A Yulong Petrochemical representative did not immediately comment. The NDRC did not immediately respond to a Reuters' request for comment.
(Reporting by Chen Aizhu; Editing by Tom Hogue) ((firstname.lastname@example.org; +65 6870 3284; Reuters Messaging: email@example.com))