The joint venture firm of South Korea’s energy and chemical company SK Innovation and Chinese oil/gas major Sinopec, Sinopec-SK Petrochemical, has acquired an oil refinery based in Wuhan city in China for about US$2 billion.
SK Global Chemical, an affiliate of SK Innovation, said it will invest US$160 million into the Wuhan Refinery, while Sinopec will invest 2 billion yuan in assets, according to the Korean firm’s regulatory filing.
The total acquisition price of Wuhan Refinery is 12.8 billion yuan and the remaining costs will be covered through external funds.
The acquisition is expected to close in the second half of the year.
Wuhan Refinery is capable of refining 170,000 barrel of oil per day.
SK Innovation says that the deal will allow it to secure feedstocks to make petrochemical products and integrate refining and operations at Wuhan. It also says the transaction marks the first time a South Korean company has taken a direct ownership stake in a refinery in China.