LyondellBasell-Sinopec JV to manufacture propylene oxide and styrene monomer in China
27 Jan 2021
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LyondellBasell, one of the major plastics, chemicals and refining companies in the world on Mnday announced the signing of an agreement with China Petroleum and Chemical Corporation (Sinopec), one of the largest integrated energy companies in China, to form a 50:50 joint venture to produce propylene oxide (PO) and styrene monomer (SM) in China.
First announced on 23 December 2019, the JV will operate under the name Ningbo ZRCC LyondellBasell New Material Company Limited.
Torkel Rhenman, executive vice president, Global Intermediates and Derivatives, LyondellBasell, signed the agreement to form a 50:50 joint venture (JV) with Sinopec, in Houston, Texas.
"As China's economy continues to grow, so will demand for propylene oxide and styrene monomer. We are excited to expand our relationship with Sinopec through this joint venture in order to better serve China's domestic market. Sinopec's outstanding operational capabilities combined with LyondellBasell's leading technology is a win-win," said Rhenman.
"Built on the remarkable success of our first Joint Venture, we are very delighted to continue to enhance the important partnership with LyondellBasell for future achievements. The establishment of the new Joint Venture is not only in line with the national drive for further opening-up, but also a vital step for Sinopec to deepen and expand our international operations," said Yu Baocai, senior vice president of Sinopec Corp, adding that the new joint venture will help propel economic development of the city of Ningbo to a new level.
As per the agreement, the joint venture will set up a new PO and SM unit in Zhenhai Ningbo, China with annual PO capacity of 2,75,000 tonnes per annum and 600 KTA capacity of SM.
The unit will use LyondellBasell's leading PO / SM technology. Products produced by the JV will be marketed equally by both partners, significantly expanding their respective participation in the Chinese market for PO and SM. Startup is expected at the end of 2021.
The formation of the JV is subject to approvals by relevant government authorities, including antitrust review by the State Administration for Market Regulation. LyondellBasell said it expected to make its equity contribution to the JV during the first quarter of 2021, but did not specify the amount.
According to IHS Markit, China accounts for more than 60 per cent of chemical market demand in Asia and represents 40 per cent of global chemical market growth over the next decade. PO and SM are core products of LyondellBasell and are used in a variety of applications, including packaging, building and construction, furnishings and transportation.
At present, LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu.
