F Kamber to run $6 billion China 'petrochemical city'

F Kamber Holdings has signed an agreement with a Chinese provincial government to develop and manage a 50 sq km petrochemical park at Shenyang.

The project involves an initial investment of $6 billion (Dh22bn) and a total investment of $60bn by 2015, CEO Tariq Ahmed Nizami told Emirates Business. He said the Dubai-based group was the first Middle East company to obtain such a contract in China. The site will house 40 major oil refineries, including one with an annual capacity of 1.5 million tonnes of heavy oil that will be set up by F Kamber Holding. The nearby city of Fushun is China's major crude oil processing centre with an annual refining capacity of 10 million tonnes.

"We have signed an agreement with the Shenyang Provincial Government to manage the petrochemical park," said Nizami. "Ninety per cent of the initial investment will come from the provincial government. They have also agreed to buy the entire output from the petrochemical park and have provided us with a pipeline from the nearest port to the city and a huge warehouse area to store materials.

"Many Middle East investors are keen to invest in the project and the facility will help Chinese oil companies that are active in African and Middle Eastern countries, including Iran, to refine the imported oil from their exploration projects."

The 40 refineries will include plants for liquefied natural gas (LNG), compressed natural gas (CNG) and other energy and petrochemical products.

F Kamber Holdings is talking to major investors from the Middle East and elsewhere about participating in the project. Nizami said the provincial government had authorised the group to set up a petrochemical research and development centre on the site. "Currently crude oil is imported to China through a government agency and allocated to various companies. But under this agreement we will be allowed to import crude ourselves if there is a shortage in the government's supplies. A huge amount of oil drilled by Chinese companies in Africa will be processed at the petrochemical park.

"Initial studies are over and the ground-breaking for the project will take place soon. With the current worldwide energy crisis caused by the record oil price, firms are trying to reduce refining costs, which vary from $5 to $50 per barrel. Oil refining is a labour-intensive process and refining costs in China are 40 per cent lower than in any other part of the world. The project will be completed in two years."