Based on a corporate official China's Yulong Petrochemical has reached two two-year crude oil supply agreements with BP and Chevron to supply its 400,000 barrel per day greenfield refinery in northern China starting next year.
As per Chinese government official who spoke at an investment meeting in Singapore, the refinery is scheduled to start operating for profit by December 2024.
A BP representative in China was unable to comment immediately on the agreement, while calls to Chevron in Hong Kong went unanswered, and neither oil company responded to emails.
A Yulong official mentioned that on the sidelines of a signing ceremony at the event that the new plant in Longkou county, Shandong province, plans to conduct test runs by the end of this year.
In China's most recent round of refining construction, the plant will complement two sizable new refineries that were launched in late last year. Instead of concentrating on producing transportation fuel, the refineries produce petrochemical products like plastics and chemical fibre.
As shown by Beijing's aim to shut down inefficient factories and create big, competitive manufacturers, the Yulong refinery will assist Shandong, China's third-largest provincial economy, in scaling up its fragmented refining sector, which is made up of about 60 small refiners.
Private aluminium smelter Nanshan Group owns 51% of Yulong Petrochemical; Shandong Energy Company, which is supported by the province government, owns 46.1%; and two local businesses own the other 20%.
At the refinery, Yulong is also constructing a 1.5 million ton/year ethylene facility.