Page 13 - AsianOil Week 36

AsianOil
EAST ASIA AsianOil
the Middle East and North Africa. Attending the signing ceremony, CPECC’s chairman and president Liu Haijun said: “The UAE is one of the fundamental countries in the ‘Belt and Road’ initiative. Under the stream of deepening the bilateral economic development between the UAE and China, the ADNOC and the CNPC have been working together on business expan- sion. Therefore our alliance underpins win-win outcomes, which satisfy mutual development needs, and support the direction of the Sino- UAE partnership.”
CPECC has been increasing its footprint in the Middle East in recent years.
In late 2017, it won a $1.5bn-plus engineer- ing, procurement and construction (EPC) deal from ADNOC on the Bab Integrated Facilities project, bidding as well for various other pro- jects in the country. Notable projects elsewhere in the region include the building of gas-process- ing facilities at the Halfaya oilfield and a heavy involvement in the Basrah NGL project, both in Iraq, as well as the development of Oman’s Ras Markaz Crude Oil Park.™
CNPC unit reportedly halts work on Sinovensa expansion
PROJECTS & COMPANIES
VENEZUELA’S plans for expanding the pro- duction capacity of Sinovensa, a joint venture between the national oil company (NOC) PdVSA and China National Petroleum Corp. (CNPC), may be suffering a setback. China Huanqiu Contracting and Engineering (HQC), a CNPC affiliate that is one of Sinov- ensa’s contractors, has reportedly halted oper- ations at the JV’s Jose crude blending facility in the Orinoco region.
The Chinese company notified Sinovensa of its decision to suspend work as of September 3 in a letter last week, according to documents viewed by Bloomberg and other sources. In the letter, HQC said it had taken this step because it had not been paid for its work on the expan- sion project. It explained that it had accumulated more than $52mn worth of unpaid invoices since late 2018 and cited clauses in its contract that allow it to halt operations without notice if the JV fails to settle two invoices in a row.
As of press time, none of the parties involved had confirmed reports of the suspension. PdVSA, CNPC and Sinovensa all declined to comment when contacted by reporters.
Venezuelan President Nicolas Maduro said in early August that PdVSA and CNPC had begun work on a project designed to raise the Jose crude upgrade plant’s production capac- ity up from 110,000 barrels per day to 165,000 bpd. He did not say how quickly the JV might achieve this 50% increase, but he did comment that his government was grateful that CNPC and Beijing were willing to broaden ties with PdVSA. “Thanks always to China, for all this effort and all of this co-operation,” he said during a televised appearance with Chinese government officials.
On the same day, PdVSA issued a statement clarifying Maduro’s remarks, explaining that Sinovensa intended to implement the expansion project in two stages. The first stage will bring the Jose plant’s production capacity up to 165,000 bpd, it noted, while the second stage will raise capacity further to 330,000 bpd.
PdVSA’s subsidiary Venezuelan Petroleum Corp. (CVP) set up the Sinovensa JV with CNPC in 2001 with funding from China Development Bank (CDB). The Chinese company originally owned a 37.5% stake in the project, but its equity holdings have increased over the years. Last September, PdVSA agreed to transfer another 9.9% to CNPC, thereby reducing its own stake to 50.1% and bring- ing the latter’s participation up to 49.9%.
Sinovensa extracts extra-heavy Orinoco crude and then blends it with lighter feedstock to produce a blended medium-weight grade known as Merey. Venezuelan blends are popular in China and other Asian countries, and Madu- ro’s administration has been trying to increase sales to Asian customers since the US govern- ment’s imposition of stricter sanctions earlier this year.™
Week 36 11•September•2019 w w w . N E W S B A S E . c o m P13