PetroChina plans big Singapore refinery

Singapore: China's top energy firm PetroChina is considering building a multi-billion-dollar refinery in Singapore, a local newspaper reported, allowing it to escape Beijing's fuel price controls.

Building a new 400,000 to 500,000 barrel per day (bpd) plant could cost more than $10 billion, according to recent cost estimates for similar size projects, but would fit Petro-China's ambition to become a leading fuel trader in Asia.

"It is currently doing a feasibility study and doing due diligence on this...and so far the feedback has been positive," The Business Times quoted an unnamed source as saying.

Two PetroChina officials reached by Reuters said they could not confirm the report, but downplayed its significance.

Original idea

One said the idea was first raised about three years ago as the oil major sought to sidestep Beijing's lengthy approval procedures for new plants and give it more flexibility to sell surplus products at free market rates much higher than China's fixed pump prices, which have smothered refining margins.

"The idea was to process PetroChina's equity oil overseas and supply refined fuels to China," said the official.

A second official said the report was talking about something Petro-China may consider doing in the future. "As far as I know, PetroChina is not doing a feasibility study yet," said the second official, in charge of PetroChina's trading business in Singapore, without elaboration.

The Business Times cited another source who said the new refinery would be at least 400,000 to 500,000 barrels per day.