French energy giant Total, spurred by more attractive pricing rules, is planning to set up new refining and petrochemicals projects in China, state media reported Friday.
Total wants to take advantage of a new system in China allowing competitive pricing and an appropriate profit margin for oil refiners, the China Daily reported, citing a senior company official.
"The Chinese government is going towards a more competitive pricing. We like competition because we think we are better and we can win," chairman of Total China Jacques de Boisseson said, without elaborating.
Starting this year, China has allowed gasoline and diesel retail prices, previously tightly controlled by Beijing, to fluctuate to reflect international prices so long as retail prices remained below the government's ceiling.
Under a support plan for the petrochemical industry unveiled in February, one of a series of stimulus plans for key industries, the government said it would improve the energy-pricing mechanism and hasten implementation of plans for refined-oil reserves.
"We have to prepare for production in three to five years' time. We have to invest now, otherwise the consequences will be felt in a few years' time when demand for oil goes up," Boisseson told the newspaper.
Total currently operates one refinery in northeastern China and has no petrochemicals plant in China.
It has recently set up a venture with PetroChina in the South Sulige block in north China's Inner Mongolia region.
The project is expected to have an annual production capacity about three to four million cubic metres (105 to 140 million cubic feet).
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