China
Petroleum and Chemical Corp (Sinopec) signed a contract with a
British firm Friday to build a petrochemicals complex that is
expected to be the largest of its kind in Asia when it comes on
stream in 2005.
Under the US$2.7 billion deal, BP Chemicals controls 50 per cent of
the Shanghai-based joint venture. Sinopec takes a 30 per cent stake
while Sinopec subsidiary Shanghai Petrochemical Co takes the
remaining 20 per cent.
The venture is expected to be set up in mid-September, with the aim
of developing the capacity to produce 900,000 tons of ethylene a
year.
Sinopec President Wang Jiming said: "The project is the largest
joint venture between the two companies, and we believe it will
greatly improve the competitiveness of China's petrochemicals
industry.''
With the deal, BP, one of the foreign shareholders in Sinopec, has
become one of the biggest foreign investors in China.
BP
Chemicals (China) President Graham Hunt said: "The good
relationship between the two companies, reinforced by the deal,
will lay a solid foundation for us to expand co-operation in the
future.''
BP's success is mirrored by Sinopec's other foreign shareholder,
Exxon Mobil, which is at work on another large petrochemicals
project.
Earlier this week, Sinopec said it plans to build a
600,000-ton-a-year ethylene cracker in a Sinopec refinery in East
China's Fujian Province, with Exxon Mobil and Saudi Aramco. Sinopec
takes half the stake while the other two share the rest.
Sourcing half its petrochemicals product demand from imports, China
has forged links with foreign giants to help it build large
petrochemicals plants.
The country is expected to double its ethylene capacity to about 8
million tons within the next five to six years through the launch
of several joint complexes.
In
Nanjing, capital of East China's Jiangsu Province, Germany's BASF
AG and Sinopec are constructing a US$2.65 billion integrated
petrochemicals site to turn out 650,000 tons of ethylene annually
by 2004.
The 50-50 joint venture is to be the nation's third largest
petrochemicals plant after the US$4 billion project between the
China National Offshore Oil Corp and the Royal Dutch/Shell Group in
Guangdong Province.
The Guangdong complex is to output 800,000 tons of ethylene
annually by 2005.
Matt Flanagan, director of the Beijing office of Accenture's Global
Energy and Chemicals, said joint ventures were a win-win solution
for both companies, combining the strength of domestic firms'
brands with the technology and management of foreign companies.
(China
Daily 09/01/2001)