LyondellBasell has signed an agreement with Liaoning Bora Enterprise Group (Bora; Panjin, China) to form a joint venture (JV) in northeast China that will initially operate a 1.1-million metric tons/year ethylene cracker to produce olefins and polyolefins.
Bora had previously selected LyondellBasell’s polypropylene (PP) and high-density polyethylene (HDPE) technologies in July 2017 for two PP units with a combined capacity of 600,000 metric tons/year based on the Spherizone and Spheripol technologies, and a 350,000-metric tons/year HDPE plant using the Hostalen ACP process at its Panjin complex. Bora began construction of the facility earlier this year, says LyondellBasell.
“China is the largest, fastest-growing market in the world for our core products. The formation of this JV with a well-respected Chinese company allows us to increase our flexibility to produce these products closer to the customer. We see tremendous opportunity to create additional value and potentially grow further in this very important market,” said LyondellBasell CEO Bob Patel.
The 50/50 JV is also planning to invest an estimated $12 billion in multiple phases over the next 10 years, according to Bora. The JV for the petrochemical complex currently under construction in Panjin, Liaoning Province, “will significantly expand LyondellBasell’s participation in the rapidly growing Chinese olefins and polyolefins markets,” according to the company.
Polyolefin products produced at the complex, due for completion in 2020 according to IHS Markit data, will be marketed by LyondellBasell. All products made via the JV are intended for domestic use in China, the company tells CW. Feedstock for the Panjin cracker is expected to be naphtha and LPG, according to IHS Markit data.
LyondellBasell confirmed to CW that there would also be styrene production at the complex but would not confirm details in a report by Reuters, quoting the official Chinese Xinhua news agency, that the facility would produce 350,000 metric tons/year of styrene. The Reuters report also stated the first phase of investment would total $2.5 billion and involve total production of 800,000 metric tons/year of PE, which was also not confirmed by LyondellBasell.
No formal signing date for a full agreement has been scheduled “but we are currently working through these details,” a spokesperson told CW.
The agreement for what Bora describes as the ‘Light Hydrocarbon Utilization Project’ will see LyondellBasell acquire a proposed 50% equity interest in Liaoning Bora Petrochemical Co., Ltd., a subsidiary of Liaoning Bora Enterprise Group, which is the largest private petrochemical enterprise in northeast China. It currently has total assets of over 60 billion renminbi ($8.4 billion), according to Bora. The project is part of the Chinese government’s policy to revitalize the industrial base in northeast China and develop a world-class petrochemical and specialty chemicals base.
The estimated annual revenue of the Bora Group will exceed $14 billion by the time the Panjin plant’s full Phase 1 production capacity is achieved, it says.
China makes up more than 60% of the Asian chemicals market and represents 40% of global chemicals growth over the next decade, according to IHS Markit.
By Mark Thomas
Source: Chemical Week
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