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Analysis - PetroChina seeks European refinery assets

02 Jul 2010 19:34 (+01:00 GMT)
Analysis - PetroChina seeks European refinery assets

Singapore, 2 July (Argus) — State-run PetroChina is stepping up its quest for downstream assets in Europe to help it boost its trading presence there. It is hoping for potential bargains from majors such as Shell and Total, which are divesting refineries in the region.

PetroChina has hired a consultancy to carry out a study on European refineries currently for sale, after an earlier unsuccessful bid for Ineos' 205,000 b/d Grangemouth refinery in the UK. And PetroChina is talking to Shell about acquiring its refineries in Europe. Shell's negotiations to sell three European refineries to Indian refiner Essar have been protracted and the major could turn to PetroChina instead.

Of the plants Shell is putting up for sale, the Chinese firm is most interested in the 246,000 b/d Stanlow refinery in the northeast UK. It is less interested in the smaller 100,000 b/d Hamburg and Heide refineries in Germany. PetroChina's priority is to secure access to northwest Europe's Amsterdam-Rotterdam-Antwerp oil trading hub.

Shell is already a partner with PetroChina and Qatar's state-owned QP in a planned 440,000 b/d refinery at Taizhou in the east China province of Zhejiang. Shell's joint ventures with PetroChina have accelerated in the past year, with the largest being the A$3.5bn ($3bn) acquisition of Australian firm Arrow Energy. Shell secured a deal to develop tight gas resources with PetroChina in China's Sichuan and Shaanxi provinces.

PetroChina's main trading office outside China is in Singapore. It has a 35pc stake in Singapore's 14.5mn bl Universal Terminal. And it bought its first overseas refinery last year when it acquired Singapore Petroleum (SPC), which owns a 50pc stake in the 285,000 b/d Singapore Refining. PetroChina finalised a deal with Japan's JX Holdings on 30 June to market output from their 115,000 b/d Osaka refinery joint venture in Japan from 1 October. PetroChina holds a 49pc stake.

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