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CNPC to Set Up Oil Refineries in Chad

CNPC to Set Up Oil Refineries in Chad which will be the first in each of the landlocked African countries

State-owned China National Petroleum Corp (CNPC) broke ground for new oil refineries in Chad and neighbouring Niger this week, as the company boosts its ties with resource-rich countries in Africa.

The refineries will be the first in each of the landlocked African countries, which remain desperately poor but have seen their state incomes surge during the resource boom of recent years.

Chad struck oil in 2003, pumping it from southern oil fields via a 1,000-km (620-mile) pipeline through Cameroon. Niger has cashed in on soaring prices for its uranium exports, breaking a French mining monopoly to attract more foreign investors. China has become a key investor in both countries.

CNCP struck a $5 billion deal with Niger's government in June to pump oil from the Agadem block within three years and build a 2,000-km pipeline to export it. Niger's southern neighbour, Nigeria, is Africa's top oil producer.

The deal, which included a 127 billion CFA franc ($240 million) signature bonus, also bound CNCP to build Niger's first refinery, for which Niger President Mamadou Tandja laid the foundation stone at a ceremony on Monday, state TV reported.

"We hope this will signify Niger joining the industrial revolution and mark the beginning of our energy independence," Niger Prime Minister Seyni Oumarou said in a speech at the ceremony. The speech was shown on television.

The refinery, 950 km east of Niger's capital Niamey in Ganaram, will be able to refine 20,000 barrels of oil a day -- exceeding the country's current consumption of around 7,000 barrels. It is projected to take three years to build.

Across the border, CNCP laid the foundation stone for its new refinery in Chad's capital N'Djamena on Sunday.

The refinery is due to start refining 20,000 barrels a day (BPD) from 2011, rising later to 60,000 bpd. Chad currently produces 140,000-160,000 bpd of crude, which is all exported, and it has to import all its fuel requirements.

The Chad refinery plans include a power station which will provide around 20 MW of power to the capital, N'Djamena, increasing the country's installed capacity by approximately two-thirds, according to data from the U.S. government's Energy Information Administration.

Author: Jo Amey