State-controlled Chinese oil giant PetroChina and UK-based chemical producer Ineos Friday completed the formation of their European trading and refining joint venture, the companies said in a statement Sunday.
The proposal, which marks the first entry of a Chinese company into the European refining sector, was unveiled in January this year and was previously expected to be completed by the end of May. Under the terms of the deal, PetroChina paid $1.015 billion in cash for a 50% stake in the joint venture, which includes trading and refining activities at Ineos' Grangemouth refinery in Scotland and Lavera refinery in southern France.
Both refineries process around 210,000 b/d of crude oil. Grangemouth provides refined products to Scotland, northern England and Northern Ireland, while Lavera supplies fuel via pipelines into France, Switzerland and southern Germany.
The joint venture business employs about 1,000 people and has an annual turnover of $15 billion.
"The joint ventures with Ineos are consistent with PetroChina's strategy to build its broader business platform in Europe as a leading international energy company," said Si Bingjun, general manager of PetroChina International London.
The formation of the joint venture strengthens the long-term sustainability of both refineries, according to Ineos. "The formation of the joint ventures provides further investment in our refineries, and enhances their competitiveness in European markets," said Calum MacLean, CEO of Ineos Refining.
PetroChina's parent company China National Petroleum Corporation and Ineos are also progressing a strategic cooperation agreement to share refining and petrochemical technology and expertise between their respective businesses, the companies added.
