CPC moves forward on two major Middle East oil agreements

September 28, 2005

Chinese Petroleum Corp. is leading a consortium of Taiwanese petrochemical companies in a joint venture with OPEC member the United Arab Emirates to construct the world's largest petrochemical complex in Abu Dhabi. The initial plans calls for an investment of USD 6 billion. On top of an annual capacity of 1.3 million tons of ethylene, the ultra-modern complex will produce butadiene, propylene, polyethylene and other petrochemical products.

Also, as part of this joint venture, the UAE is to invest in 20% of the Guogwang petrochemical plant, slated for construction in Southern Taiwan.

Following their visit to the UAE in early September, CPC officials traveled to nearby Qatar on September 13 where they signed an important 25-year natural gas supply contract with that nation, home to the largest known non-associated natural gas field in the world. Starting in 2008, CPC will import 3 million tons of liquefied natural gas under this agreement, ensuring a stable supply for the natural gas-powered Tatan Power Plant in Taoyuan County.

CPC currently relies on Indonesia and Malaysia for the bulk of its natural gas procurements. In addition to diversifying Taiwan's oil and gas sources, these agreements allow Taiwan to establish deeper relationships with the Middle East.

Taiwan's significant oil refining capacity should prove strategically important as oil prices rise due to the current supply bottleneck at the refining level.

(United Daily News, Central News Agency, Taipei Times)

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