China's Sinopec, Kuwait Petroleum ink cooperation pact on oil and refining

China's state-owned Sinopec said Wednesday it has signed a pact with Kuwait Petroleum Co to enhance cooperation in the oil sector, including refining.

Sinopec, or China Petrochemical Corp., said the deal was signed Tuesday in Beijing in the presence of Chinese Premier Li Keqiang and Kuwaiti Prime Minister Sheikh Jaber Mubarak Al-Sabah.

Sinopec said both companies will continue to deepen cooperation in crude oil trading, crude reserves storage, refinery projects and refinery engineering services. No other details were provided.

The new deal indicates both sides could be reviving stalled talks for a joint venture refinery in Zhanjiang in China's southern Guangdong province.

Sinopec last said in its 2013 annual earnings statement issued late March that the 15 million mt/year Zhanjiang refinery would be delayed by a year to 2017. The plant will include an 800,000 mt/year ethylene unit and a 300,000 mt/year jetty.

Sinopec and KPC's overseas arm, Kuwait Petroleum International, had signed a joint venture agreement for the refinery in June 2011, following over five years of talks.

Sinopec was to hold a 50% stake in the refinery, and KPI the remaining 50%, although the Kuwaiti company had indicated its desire to farm out a 20% interest to a third partner.

The plan was for the $9 billion refinery to run on Kuwaiti crude. Since 2012 however, there has been little update on the equity sharing in the project and sources have previously said KPI's interest was waning and it was not clear if the company was still involved. Sinopec has also made no mention of KPI's involvement in its updates in the last two years.