BEIJING - China's Sinopec signed a preliminary pact with Kuwait to build a nine-billion-dollar refinery in southern China, the firm said Wednesday, after it was forced to move the plant due to environmental concerns.
Asia's biggest refiner and Kuwait Petroleum International signed a memorandum of understanding (MoU) with the Guangdong government on Monday, Sinopec said in a statement on its website.
The oil refinery project has been moved to an island near Zhanjiang city, the government said in a statement, after residents and environmental groups opposed its original location at Nansha, near the provincial capital Guangzhou.
The refinery is expected to process up to 15 million tonnes of oil a year and produce one million tonnes of ethylene, using crude mainly from Kuwait, the statement said.
The original plan faced strong opposition from campaigners in Hong Kong over worries about its environmental impact.
The plant would have been only 37 kilometres (23 miles) from Hong Kong, which neighbours Guangdong and has suffered from increasingly poor air quality during southern China's rapid economic expansion over the last 30 years.
In an apparent attempt to address environmental concerns, Sinopec said the design and management of the plant would "strictly follow the most advanced international environment protection standards".
Chinese media reports said Sinopec may hold a 50 percent stake in the project, which was expected to come online in 2013, with the remaining stake to be shared by the Kuwaiti side and their foreign partners including Shell.
Opposition to industrial projects is on the rise in China amid increasing reports of factory accidents and pollution causing severe health and ecological problems.
A billion-dollar petrochemical plant had to move from Xiamen in the southeastern province of Fujian to a more remote location after residents in the city staged an unprecedented storm of protest in 2007.
Kuwait: Gulf single currency not imminent