It is doubtful whether PetroChina could reach a co-operation agreement with independent refineries in Shandong Province and the local government at the end of August, according to market sources.
The three parties are currently still in preliminary negotiation on establishing a joint-venture as an agent to supply crude and fuel oil to independent refineries, said a source participating in the negotiation.
An official with the Shandong Provincial Oil & Gas Office confirmed the negotiation is going on, but declined to give more details.
The above source participating in the negotiation denied the report that PetroChina would buy 50% stakes in the 21 refineries involved, "because the final list of participants is to be decided and it is hard to purchase 50% stakes in those already acquired by state-owned oil companies."
The opinion is echoed by a source with PetroChina, saying "there is no plan to purchase stakes in independent refineries at the moment because of various shareholders."Some refineries affiliated to ChemChina were involved, the source said.
Most refinery sources interviewed by C1 believed the co-operation would be positive.
Although share ownership may be a problem, stable feedstock source is attractive enough for owners of independent refineries, said one of the sources.
Crude demand of Shandong independent refineries is more than 15-mil mt per year, and the demand still has upside room, the source said.
In Shandong, PetroChina has only established co-operation with Dongming Petrochemical on providing crude to the later.
