CNPC shuts Niger refinery after mechanical failure

China National Petroleum Corp.'s (CNPC) Soraz oil refinery in Niger has shut down due to a mechanical failure, according to a report from news agency Reuters.

"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 Niger government to process the oil, with a capacity of 20,000 bpd. 

The refinery in Zinder, located about 500 miles east of the capital Niamey, has never reached full production, processing between 12,000 and 16,000 bpd, according to the Reuters report.. About 7,000 bbl 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/bbl for crude supplied to the Soraz refinery, Reuters reported. CNPC renegotiated a new price of $57/bbl in July, but that figure is still well above current world crude prices.