China National Petroleum Corporation (CNPC) has been given the green light to expand its Dushanzi Petrochemical Refinery in northwest China's Xinjiang Uygur Autonomous Region, a move that will make it the largest refinery and petrochemical complex in the country.

Most of the crude oil for the facility will come by a 1,200-kilometer pipeline from Kazakhstan, a source that is being exploited to ease the country's oil shortages. The refinery, located in Dushanzi, will raise its processing capacity to 10 million tons per year from the current 6 million tons.

The refinery will also expand its ethylene production capacity to 1.2 million tons annually, up from the present 220,000 tons each year.

The expansion of the facility, which will cost 27.2 billion yuan (US$3.3 billion), is expected to start soon and be completed by 2008.

The pipeline that will supply the crude oil links Atasu in Kazakhstan to Dushanzi, and is China's first major land oil import route.

Construction of the pipeline started last September. When the first phase is completed by the end of this year, it will be able to deliver 10 million tons of crude oil. It is set to double capacity to 20 million tons with the completion of the second phase.

Refinery management said that the lack of crude oil has kept the facility operating below capacity, at about 4 million tons of crude annually.

"When the China-Kazakhstan oil pipeline doubles the capacity in the second phase, the plant may also expand its refinery capacity beyond 10 million tons," said one manager.

(China Daily February 17, 2005)