Perisson Petroleum has signed a non-binding memorandum of understanding (MOU) with Hebei Xinquan Petrochemical (Xinquan) to acquire controlling interest in refinery located in Hebei, China.

petrochemical-plant-generic

Image: A petrochemical plant. Photo: courtesy of supakitmod/Freedigitalphotos.net.

The two firms will now negotiate the terms whereby Perisson plans to invest into Xinquan in exchange for a controlling interest in Xinquan.

Xinquan, which has a present production capacity of 2.8 million tons of lubricant base oil, aromatic hydrocarbons and asphalt, currently operates a petrochemical refinery and associated tank storage located 8km inland from Bohai Bay approximately 80km south of Tianjin, China.

The product production capacities at the refinery include 1.5 million tons of Asphalt per year, 0.9 million tons of coking per year, hydrogenation unit with 0.3 million tons per year, desulfurization unit with 0.1 million tons per year, hydrogen production unit with 5,000 M2/h, and a Sulfur unit with 5,000 tons per year.

Xinquan is also planning an expansion project at the refinery to expand the production capacity by 2.1 million tons including 3.5 million tons per year of Asphalt, a 1.1 million tone hydrocracking unit, a 0.8 million tone hydro-refining device, a 3,500M2/h hydrogen production unit, and 20,000 tons per year sulfur unit.

Scheduled to be completed by the end of 2018, the expansion project is expected to result in an increase in production capacity to 5.6 million tons at the refinery.

The investment in Xinquan Refinery is part of Perisson’s long term strategy to become an integrated global oil and gas company.

The transaction is planned to be completed in early July of this year and will be subject to due diligence, TSX Venture Exchange and regulatory approvals.

Perisson currently owns certain oil and gas producing properties in the Twining area of Alberta, Canada as well as 100% interest in the VMM-17 block, a license located in the Middle Magdalena Basin in central Colombia.