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This marks the first Sino-foreign venture with integrated businesses ranging from oil refining to chemical production and refined oil sales in China, the firms said in a joint statement yesterday.

Expansion of the Quanzhou site will lift annual oil refining capacity to 12 million tons, or 240,000 barrels per day, from the current four million tons a year, or 80,000 barrels per day. It will process Saudi Arabian crude oil.

An 800,000 tons-a-year ethylene steam cracker and a 700,000 tons-a-year paraxylene plant, among other petrochemical facilities, will be built on the site, the companies said. Ethylene is a basic petrochemical building block while paraxylene is a key raw material used to make polyester.

It will also include a 300,000-ton crude oil dock among other support facilities.

Sinopec, Exxon and Saudi Aramco will hold a 50, 25 and 25 percent stake respectively in the project, which is scheduled for commissioning in early 2009, when construction finishes.

The National Development and Reform Commission, China's top industry planner, which approved the project, has said it will cost 3.77 billion yuan (US$483 million) for the expansion.

A separate fuel marketing and sales venture between the trio was also agreed yesterday, with Sinopec holding a 55 percent stake and Exxon and Saudi Aramco each holding 22.5 percent. This venture will operate about 750 gasoline stations in Fujian and several oil tanks.

"The project is a major one and makes sense as it could gain both crude oil and expertise from foreign participants," said an analyst at Shenyin Wanguo Securities. "For foreign firms, they also gain access to China's fuel retail sector."

The joint statement also said: "The Fujian petrochemical venture and the fuel sales venture will serve to meet China's rapidly growing demand for petroleum products and petrochemicals."

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