September 11, 2013 / 2:30 AM / in 4 years

Shell's $13 billion China refinery project shelved: paper

(Reuters) - An 8.3 billion pound ($13 billion) project to build a refinery and petrochemical plant in eastern China involving Royal Dutch Shell (RDSa.L) has been shelved after losing political support, the Telegraph newspaper reported, citing sources.

A Shell logo is seen at a petrol station in London January 31, 2013. REUTERS/Luke MacGregor

The plant in the eastern city of Taizhou -- a tie-up with Chinese state-backed oil firm China National Petroleum Corp (CNPC) and Gulf energy giant Qatar Petroleum -- would have refined 20 million tons of crude and produced 1.2 million tons of ethylene a year. Construction had been due to start last year.

The newspaper said the project appeared to have fallen victim to local opposition and politics.

It quoted a senior petrochemical executive as saying the Chinese had confirmed the project had been cancelled, possibly due to land problems.

A second source told the newspaper the project would be permanently suspended. (link.reuters.com/duj92v)

A Shell spokesman told the Telegraph that the company was still conducting a feasibility study into the project. Shell and CNPC could not be reached for comment.

A high-level Chinese government probe into corruption at CNPC widened at the end of August, with three additional senior officials at the energy giant being investigated over alleged wrongdoing.

($1 = 0.6361 British pounds)

Reporting by Richa Naidu in Bangalore; Editing by Richard Pullin

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