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CNPC and Nippon Oil ink agreement for JV refinery

CNPC, the largest Chinese oil firm, signed a letter of intent with Tokyo-based Nippon Oil Corp. for the creation of a Japanese joint venture (JV) refinery. Construction of the refinery, which will process 115,000 barrel per day (bpd) of oil, is expected to start at Osaka in April 2009. Nippon Oil (51%) will operate and manage the new refinery, whereas CNPC (49%) will supply crude oil and be responsible for the sale of petroleum products. In addition, Nippon Oil has agreed to increase the amount of oil it refines for CNPC from 20,000 bpd to 70,000 bpd. The refinery JV will be the largest cooperative project between China and Japan in the energy sector. To meet rising Chinese demand for both fuels and chemicals, CNPC is aiming to increase its refining capacity to 300 metric ton per year (mtpy) by 2020. (May 26, 2008)