CNPC's Niger Refinery Shut Due to Mechanical Dailure

China National Petroleum Corporation's (CNPC) Soraz oil refinery in Niger has shut down due to a mechanical failure, a company spokesman and an energy ministry official said on Thursday.

 

"The refinery has broken down. That's all I can say," Soraz spokesman Magagi Dada told private television station RTT.

 

The West African country became an oil producer in 2011. The refinery was built as a joint venture between CNPC and the government to process the oil, with a capacity of 20,000 barrels per day.

 

The refinery in Zinder, some 800 km (500 miles) east of the capital Niamey, has never reached full production, processing some 12-16,000 barrels per day. Seven thousand barrels is reserved for the domestic market and the remainder for export.

 

A senior energy ministry official told Reuters that CNPC had suspended refining for the export market two months ago over a price row.

 

CNPC's agreement with the state fixed a purchase price of $67 per barrel for crude supplied to the Soraz refinery. CNPC renegotiated a new price of $57 per barrel in July, but that figure is still well above current world crude prices.

 

U.S. crude fell to 6-1/2 year lows of below $40 per barrel this week.