According to a statement released by Sinopec, the estimated $7bn-10bn project will be built at Nansha in southern China, near Hong Kong.

In 2005, KPC signed a memorandum of understanding with Beijing to develop a refinery in the southern province of Guangdong. Details of the project structure are not yet clear, but KPC is likely to be joined on the scheme by its subsidiary Kuwait Petroleum International and Equate Petrochemical Company, a 50:50 joint venture of the US’ Dow Chemical Company and Petrochemical Industries Company (PIC), another KPC subsidiary.

Sources close to the scheme say that the full feasibility study will be submitted to the Chinese government next summer.