China＇s CNOOC Hizhou Petchem Plant Wants U.S. LPG As Feedstock

HONG KONG - A new Chinese petrochemical plant plans to use rising exports of U.S. liquefied petroleum gas (LPG), part of the shale boom, as a cost-saving feedstock, joining other plants on China's east coast.

The second phase of Chinese energy giant CNOOC Group's $8 billion petrochemical complex in the southern city of Huizhou intends to use U.S. LPG, a senior executive of the multi-billion dollar project's contractor said on Monday.

"The petrochemical project will use U.S. LPG as a raw material," said Yan Shaochun, executive officer and chief executive officer of Sinopec Engineering, which is involved in the design of the project, told Reuters on the sidelines of his company's interim results briefing.

China's first purchases of U.S. LPG were made last year, amounting to 3,530 barrels per day, according to Chinese customs' data, in deals done by little known private firms.

Earlier this year, Sinopec Corp , Asia's largest refiner, struck a deal to buy LPG from U.S. refining company Phillips 66 for delivery from 2016.

China's total LPG imports could reach half-a-million bpd by 2020, up nearly four-fold from last year and overtaking other key Asian importers such as Singapore and Indonesia, they said.

CNOOC group, parent of China's largest offshore oil producer CNOOC Ltd , is spending $8 billion to expand its refining and petrochemical complex in Huizhou, near Hong Kong. The second phase of the project calls for the construction of a 200,000-barrels-per-day refinery and a 1 million-tonne-per-year ethylene plant on top of its existing 240,000-bpd refinery and 800,000-tpy ethylene plant.

The design of the second-phase project is almost completed, and construction is ready to begin in the second half of this year, said executives of Sinopec Engineering, a unit of Sinopec Group, parent of Sinopec Corp. (Reporting by Charlie Zhu in Hong Kong and Judy Hua and Aizhu Chen in Beijing, editing by David Evans amd William Hardy)

（Reuters  Edited by Topco)