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Tuesday, Nov 03, 2009
(Adds crude oil supply pact, plans for other joint petrochemical projects)
BEIJING (Dow Jones)--China Petrochemical Corp., also known as Sinopec Group, and Saudi Basic Industries Corp. (2010.SA), said Tuesday their joint venture petrochemical complex in Tianjin, China, will be ready to start operations by the second quarter of 2010.
Under the agreement, Sabic will supply Sinopec with 10 million metric tons a year of crude oil, equivalent to 200,000 barrels a day, for use in the Tianjin complex and for other projects, Sinopec president Wang Tianpu said.
The two companies also intend to build other petrochemical facilities in China and abroad, including possibly in Saudi Arabia, the Sinopec official said.
At a ceremony in Beijing, the two companies said they had created a 50:50 joint venture called Sinopec Sabic Tianjin Petrochemical Co. Ltd. to operate the new complex.
A one million-ton-a-year ethylene cracker, eight downstream units and all utilities have been tested, and are ready to begin production by the second quarter of next year, Wang said at the signing ceremony.
"The construction has been mostly completed and (the facilities) will be put into operation very soon," he said.
The companies confirmed that the complex would have an overall output of 3.2 million metric tons a year of various petrochemical products, and that the project had required an investment of CNY18.3 billion.
In addition to ethylene, it will produce polyethylene, ethylene glycol and polypropylene, among other products.
"Our two companies intend to build other petrochemical enterprises in China. It might be in Tianjin or other areas, and overseas, it might be in Saudi Arabia," Wang said.
Sabic Chairman Prince Saud Bin Thenayan Al Saud said: "We have developed great synergy between two companies based on our shared goal of providing high-quality petrochemical products to the domestic Chinese market. The project will benefit us both greatly."
Wang said that while the plant's output will mainly supply the Chinese market, there is also a possibility that some of it may be exported.
Sinopec's refining capacity this year will be close to 200 million tons, and its crude runs next year will be 205 million tons, Wang said.
-Wan Xu contributed to this article; Dow Jones Newswires; 8610-84007799; wan.xu@dowjones.com
(END) Dow Jones Newswires
03-11-09 1038GMT
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