SINOMACH and CPC to build first Cambodia refinery
On December 28th 2012, China Perfect Machinery Industry Corp (SINOMACH) and Cambodia Petrochemical Corporation (CPC) made the final investment decision (FID) to build the first crude oil refinery in the Kampong Som Petrochemical Industrial Zone along the southern coast in Cambodia.
This $2.3 billion capital expenditure this refinery should have a capacity of 100,000 b/d (5 million t/y) of crude oil.
This project is to be financed by China as part of a large program of exploration and production of offshore oil and gas resources.
In 2005, the US super major Chevron and its partners, Mitsui, Kris Energy and GS Caltex, started the exploration of the Block A in the Gulf of Thailand with very encouraging results about the estimated oil and gas resources in-place to be counted by hundreds million barrels of oil equivalent (boe).
Chevron hit oil and in 2010 submitted an application to develop the first phase of the Aspara field.
Unfortunately since then, Chevron and the Cambodia Government could not find a way to close a production sharing agreement (PSA) so that the oil and gas production from the Block A should not start before 2016.
In this context, Cambodia is importing all its oil consumption, 1.58 million tonnes in 2011, from Singapore, Thailand and Vietnam.
This import is composed of 55% diesel, 25% gasoline, 10% fuel oil and 10% kerosene.
According to the World Bank, the economical forecast of growth in Cambodia should pull the oil consumption to continue to increase by 10% per year until 2030.
KBR to team up with Tianjin Petrochemical Engineering
In June 2012, China and Cambodia signed a first agreement to invest $400 million capital expenditure in a 300 MW coal-fired power plant in the Kampot, the largest Port of Cambodia in the south of the country.
This power plant will supply the Kampot Special Economic Zone and the crude oil refinery to be installed at Prey Nob in the neighboring Sihanouk Province.
In January 2013, the Prey Nob refinery took more momentum with the decision of SINOMACH and CPC to award the cracker license and the related engineering services contract to the Houston-based KBR.
According to the agreement, KBR will provide the Cambodia refinery with the Veba Combi Cracker (VCC) technology and the basic engineering to construct this unit.
With this cracker, SINOMACH and CPC will be able to process 1.2 million tonnes per year of refinery vacuum residues into valuable naphtha and Euro 5 diesel fuel.
The capability to recycle the refinery residues into high added value hydrocarbon products contributes directly to the commercial viability of the project.
For KBR, this Cambodia refinery is the fourth project to use the Veba Combi Cracker technology since 2010.
SINOMACH and CPC selected Tianjin Petrochemical Engineering Design Corporation Ltd (TPED) for the engineering, procurement and construction (EPC) contract of the Kampong Refinery project.
Located in Tianjin, in the Tianjin Province on the northeast coast of China, TPED is a class A certified Chinese institute operating in China as engineering and services company in the oil and gas and petrochemical industry.
TPED belongs to SINOMACH and therefore developed a close cooperation with its operating owner.
In this scheme, KBR received this order from CPC and will work with TPED for the engineering and construction under the behalf of CPC and SINOMACH.
With the cooperation taking place between KBR and Tianjin Petrochemical Engineering, CPC and SINOMACH expect the first Cambodia refinery to come on stream in late 2015.
