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IPIC to buy stake in CPC oil project

International Petroleum Investment Co (IPIC) signed an initial accord to buy a stake in a NT$370 billion (US$11.6 billion) petrochemical project led by Chinese Petroleum Corp (CPC, 中油), said Kuo Chin-tsai (郭進財), chairman of the Taiwanese refiner.

International Petroleum Investment and Chinese Petroleum have signed a letter of intent for the Abu Dhabi, United Arab Emirates-based company to buy the stake in the project in western Taiwan, Kuo told reporters during a national energy conference in Taipei yesterday.

The venture will replace a facility in Kaohsiung, in southern Taiwan, that Chinese Petroleum pledged to shut by 2015 amid complaints about pollution. The new plant will use more efficient technology and help the company compete with other refiners. An agreement with IPIC would form part of Chinese Petroleum's efforts to ensure crude oil supply for project.

"Through cooperation with IPIC, we hope to secure a source of raw materials," Kuo said. A Chinese-language newspaper reported earlier that IPIC may take a 20 percent stake in the project in western Taiwan, which will include a 300,000 barrels-a-day crude oil refinery.

Chinese Petroleum on Feb. 4 signed an agreement with five local partners for the project in Yunlin on Taiwan's west coast, which will include an oil refinery, a plant that turns naphtha, an oil product, into ethylene and dozens of units that produce other chemicals for plastics and textiles, the vice president Roy Chiu (邱吉雄) said at the time.

Several other Arab companies are also interested in the project, Kuo said, without naming the potential investors.
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