Yulong Petrochemical agrees crude supply deals with BP, Chevron for 2024

China's Yulong Petrochemical has agreed two two-year crude oil supply deals with BP and Chevron to supply its 400,000 barrel-per-day greenfield refinery in northern China from next year, a company official told Reuters on Monday.

The refinery is due to begin commercial operation by December 2024, a Chinese government official told an investment forum in Singapore.

A spokeswoman for BP in China could not immediately comment on the agreement, while calls to Chevron in Hong Kong were unanswered, and neither oil major responded to emails from Reuters seeking comment.

The new plant in Longkou county in Shandong province is aiming to carry out test runs late this year, a Yulong executive told Reuters on the sidelines of a signing ceremony at the forum. The plant will add to two large new refineries started late last year, in China's latest wave of refining expansion. The refineries are focused on petrochemical products such as plastics and chemical fibre rather than transportation fuel.

The Yulong refinery will help Shandong, China's No.3 provincial economy, scale up its fragmented refining sector - made up of some 60 small refiners - in line with Beijing's push to close inefficient plants and build large, competitive manufacturers.

Yulong Petrochemical is 51 per cent owned by private aluminium smelter Nanshan Group, 46.1 per cent owned by provincial government-backed Shandong Energy Group and the remainder owned by two local firms.

Yulong is also building a 1.5 million tonne-per-year ethylene complex at the refinery.