Chinese energy giant Sinopec, also known as China Petroleum & Chemical Corporation, has reportedly confirmed that its plans to build a $5 billion oil refinery with non-domestic partners Royal Dutch Shell, Dow Chemical and Kuwait Petroleum Corporation are progressing well.

China Daily cited Sinopec’s president, Wang Tianpu, as saying: We are right on track, negotiating with overseas partners to build a refinery and petrochemical complex in Guangdong Province. Its processing capacity will be 12 million tons.

Mr Tianpu went on to say that the petrochemical plant would have an annual production of some 800,000 to one million tons of ethylene. The plant would be in the south of the Guangdong Province, near Hong Kong, the Financial Times revealed.

According to the business publication, Sinopec’s plans to build the oil refinery had previously been delayed by numerous factors, including a reluctance to depend on Kuwait as the sole supplier of oil for the refinery.

The Financial Times also revealed that, as yet, the industry is unsure as to why Sinopec has suddenly resumed the refinery talks, but said that it could be Su Shulin, the company’s newly appointed chairman, trying to show his commitment to perusing large projects for Sinopec.

The Financial Times reported that the scheme would represent one of China’s largest joint venture initiatives, but added that none of the proposed partners were available for comment.

China Daily speculated that the project would hike up competition for fellow player China National Offshore Oil Corporation’s (CNOOC) refinery in the province, but cited a CNOOC spokesman as saying that he believes that the vast economic expansion in the region will provide sufficient demand for both refineries.