Wednesday, January 19, 2011

China proposes cheap loans to revamp Aden refinery

Observed by: Mr. Alaa Isam

BEIJING Jan 19 (Reuters) - China may consider offering preferential loans to help upgrade the largest refinery in Yemen, extending the world's second-largest oil user's downstream exposure in the country, a Ministry of Commerce study proposed.

Chinese firms have so far been focused in the upstream sector in Yemen. The country's plan to expand its 160,000 barrel-per-day (bpd) Aden refinery by using international loans offered a new opportunity for Chinese petrochemical firms, the ministry's Aden business office said in the study published on

It would facilitate exports of large petrochemical equipment to the Middle East country if Chinese firms were awarded some construction contracts, and would add a steady source of oil for China if Yemen repaid the loans with refined oil products.

Yemen planned to invest $1.5 billion yuan for the renovation and expansion of the Aden refinery that currently processes only light crude, the study said.

Yemen's oil minister Amir al-Aidarous told Reuters in January last year that the country was in talks with firms including China's Sinopec Corp (0386.HK: Quote) to upgrade the refinery. [ID:nLAE753457]

Sinopec, Asia's largest refiner, does not have any major investment in overseas refineries.

China's top oil and gas producer PetroChina (0857.HK: Quote) agreed this month to buy into two refineries in France and Scotland of British firm INEOS, its first foray into the European market after earlier refinery acquisitions in Singapore and Japan with a combined investment of more than $2 billion. [ID:nTOE70905Q] (Reporting by Jim Bai and Aizhu Chen; Editing by Jacqueline Wong)


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