China and Russia may join forces to build an oil refinery in Tianjin, the port city just east of Beijing. The refinery, which will be able to process 10 million tons of crude annually, will cost an estimated $4 billion. From China Daily:
The project is part of an agreement signed by China and Russia in 2006 to expand their oil and gas production cooperation. The two parties set up a joint venture in Tianjin in 2007.
A spokesman from CNPC yesterday declined to comment on the project. The domestic media had reported that the refinery would use crude from Russia.
China and Russia signed a loans-for-oil agreement in February. Under the agreement, China will loan $25 billion to two major Russian oil companies in return for 20 years of sustained oil supplies.
The deal includes the construction of an oil pipeline linking Russian oilfields in east Siberia with China’s northeastern region. The pipeline, the first such one linking the two countries, will be in use from 2010.