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LG, CNOOC agree to form petrochem JV

CHINA National Offshore Oil Corp and South Korea's LG Chem Ltd will build a US$370-million petrochemical plant in south China.

They agreed to form an equally-owned joint venture for the plant to produce acrylonitrile butadiene styrene, or ABS, in Huizhou, Guangdong Province, LG Chem said yesterday.

ABS is a common thermoplastic used to make light, rigid and molded products such as home appliances and automotive parts.

The plant is set to produce initially an output of 150,000 tons a year in 2011 before expanding its production to 300,000 tons per annum by 2013, LG Chem said.

The Seoul-based company aims to generate sales of US$300 million by 2012 and US$600 million by 2014 from the project.

CNOOC would provide the feedstock for the plant from its refinery and naphtha cracker facilities. CNOOC's first major refinery, a 12-million-ton-a-year plant, started in Huizhou in March.

LG Chem said it would also expand the output of an ABS plant in Ningbo, Zhejiang Province, to 700,000 tons a year from 580,000 tons by 2012.

The new Huizhou plant and the Ningbo expansion would lift LG Chem's ABS capacity to 1 million tons a year in China and 1.6 million tons overall. The firm also operates a 600,000 ton-a-year ABS plant in South Korea.

Beijing-based CNOOC is the parent of Hong Kong-listed CNOOC Ltd, the nation's top offshore oil and gas producer.


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