Monday, March 10, 2008

PetroChina Lanzhou unit loses RMB1 bln a month on rising costs

PetroChina Lanzhou Petrochemical Co, a unit of the nation's largest oil producer, is suffering a loss of up to RMB 1 billion (US$140 million) monthly crude oil processing amid surging global crude oil prices and tight domestic price controls, said general manager Yu Baocai.

The plant, based in Western China's Gansu province, lost RMB 4 billion in the processing crude sector last year, said Yu. Despite the loss in refining oil, the refinery posted a profit of about RMB 300 million a month on its petrochemical business.

Lanzhou Petrochemical will reduce capacity by between 400,000 and 500,000 metric tons in May for maintenance lasting about a month, Yu added.

Similar to 2007, the refinery will maintain the capacity of processing 10.56 million tons of crude oil, Yu said, and it will expand the production of ethylene, a key raw material for plastics, by about 3% to 700,000 tons.

Incorporated in 2000, Lanzhou Petrochemical operates a wide business range, covering oil refining, petrochemical and fertilizer production. It is the largest oil refining and petrochemical production company in Western China and one of the country's three biggest catalyzer production bases.

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