Hebei Zhongjie Petrochemical Group Co. Ltd., a subsidiary of China National Offshore Oil Corp. (CNOOC), has entered into a $700 million agreement with Genoil Inc., Calgary, to establish a joint venture for the construction of a heavy oil refinery at Zhongie Industrial Park, Hebei Province, China.
The planned 1 million-tonne/year refinery will use Genoil’s heavy upgrading process to convert low-grade atmospheric and vacuum-distillation bottoms from heavy oil into lighter distillates and finished transportation fuels, such as C5, C6, naphtha, and light diesel fuel for distribution to Chinese and international markets, Genoil said.
The refinery also would produce heavy diesel fuel, vacuum gas oil, sulfur, and ammonia, Genoil said.
Genoil will hold a 70% interest in the new joint venture, along with a 60% share in profits earned from refining activities, while HZPGC will retain a 30% ownership interest with a 40% stake in profit sharing, Genoil said.
Lending discussions with parties interested in the proposed refinery are now under way, the company said.
A firm timeframe for the project, however, has not been disclosed.
This latest contract for the refinery revises an initial agreement signed late last year by Genoil and HZPGC.
The grassroots refinery, which is based on engineering and feasibility studies previously completed for the project by China Petroleum Engineering Co. Ltd., a division of China National Petroleum Corp. (Sinopec), initially was to have a planned processing capacity of 1.2 million tpy, according to an October 2014 statement from Genoil.
