New oil refinery joint venture
New oil refinery joint venture
Locally owned Cambodian Petrochemical Company (CPC) has formed a joint venture with China’s Sinomach China Perfect Machinery Industry Corp seeking to invest $2.3 billion in the construction of Cambodia’s first oil refinery.
The construction is expected to be finished by the end of 2015.
On Friday, CPC signed an agreement with Cambodia’s National Petroleum Authority for the refinery construction.
Zhang Sugang, the president of Sinomach, said the close relationship between the two countries gave his company the confidence to further co-operate with local partners investing in the refinery.
He also said the refinery will cost $2.3 billion and take 36 months to complete on 80 hectares of land in Preah Sihanouk and Kampot provinces.
“The company will supply all equipment and technology for the construction. I firmly believe it will be successful and contribute to the economic development of Cambodia,” he said, adding that the capacity of the plant will be 5 million tonnes per year.
Mao Chetra, administration chief of CPC, said during the signing ceremony that the company has been working with Chinese partners for many years.
“Presently, Cambodia always relies on the import of oil from other countries for consumption. After the completion of the plant, Cambodia will change from an oil importing country to an oil producing and exporting country,” he said.
“Cambodia will be very strong in the oil industry because we are really committed that the plant will be equipped with high-tech and the latest technology that other countries don’t have.
“All expenses on oil importation will be minimised. At the same time, the plant will also create a new national tax revenue,” said Chetra, adding that about about 4,000 new jobs will be created.
Deputy Prime Minister Sok An, who presided over the ceremony, said the decision by the two countries is a reflection of the development of the oil industry in Cambodia.
“It is the right decision of CPC in co-operation with Sinomach China Perfect Machinery Industry Corp to invest in an oil refinery plant. The investment clearly proves the good progress of the oil industry in Cambodia,” he said.
He said Cambodia’s oil demand at this time is more than 1 million tonnes a year; however the demand will reach 3 or 4 million tonnes a year in the coming years as the country’s economy continues to expand.
He cautioned that the company has to produce quality oil in order to compete with other imported oil from Thailand, Singapore and Vietnam.
PTT, Thailand’s largest oil-and-gas conglomerate also plans to conduct a feasibility study on the petrochemical and oil refinery projects in Cambodia.
Cambodia expects to start getting oil from Chevron’s off-shore Block A by 2016.
It expects to receive about $500 million per year from generating oil, according to Mam Sambath, director of Development Partnership in Action.
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