China North Industries mulls revenue options in energy sector

China North Industries Group Co, the nation's largest arms manufacturer, will begin operations at a RMB 20 billion (US$2.9 billion) refining and chemical complex in June 2009 to meet rising domestic demand for energy.

Its subsidiary Liaoning Huajin Chemicals Corp is building a refinery with an annual capacity of five million metric tons and tripling an ethylene plant to a capacity of 450,000 tons each year, the company said.

The refinery is also expected to produce two million tons of diesel and 300,000 tons of jet fuel, it pointed out.

Beijing-based China North Industries diversifies its portfolio by moving into the oil processing sector to cash in on the booming demand for energy in China, and benefit from a possible easing in government oil price controls.

Currently, the Chinese government intervenes in oil prices in an effort to cool economy.

The company which also has interests in vehicle manufacturing and real estate development will primarily refine crude imported from the Middle East under a weapons-for-oil program.