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September 29, 2009

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Home » Business » Energy

Energy giants launch expansion

BASF SE, the world's biggest chemical maker, and China Petroleum and Chemical Corp (Sinopec), the nation's dominant refiner, began construction yesterday on a US$1.4-billion expansion of their petrochemical joint venture in east China.

The second phase of BASF-YPC Co in Nanjing, Jiangsu Province, is scheduled to begin operation in 2011. BASF-YPC is equally owned by both companies.

"There are not many investments in China in this difficult time," and this is a "very, very strong message" of BASF's commitment to China, said Martin Brudermueller, a BASF board member who heads its Asia operations,

China's 4-trillion-yuan (US$586 billion) stimulus package is helping the economy ride out of a slump and reviving petrochemical demand, he said in Nanjing.

In the second phase of the project, the capacity of the steam cracker, which makes ethylene, the key petrochemical building block, will be expanded to 740,000 tons a year from 600,000 tons. Other chemical plants will be added to supply industries from agriculture to electronics and pharmaceuticals.

China, which imports about half of its ethylene needs, aims to raise output 51.2 percent from last year to 15.5 million tons by 2011.

Dai Houliang, Sinopec's senior vice president, said the Nanjing venture will target rising demand in east China. Sinopec has petrochemical joint ventures with BP Plc in Shanghai, South Korea's SK Corp in Hubei Province, and Exxon Mobil Corp and Saudi Aramco in Fujian Province.

Dai said a planned complex with Kuwait Petroleum Corp may cost 53 billion yuan. The project, which will consist of a 15-million-ton-a-year refinery and a 1-million-ton-a-year ethylene plant, will be built in Zhanjiang, Guangdong Province.

Sinopec also plans a 10-million-ton-a-year refinery and a 1-million-ton annual capacity ethylene plant in Caofeidian in Hebei Province, he said.

BASF said in a separate statement it plans to complete a plant for MDI, used to make polymers in refrigerators and shoes by 2013. The Chongqing plant is expected to be in operation by early 2014.


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