MOSCOW (MRC) -- LyondellBasell (LBI), one of the largest plastics, chemicals and refining companies in the world, has announced it has signed a Memorandum of Understanding (MoU) to form a 50:50 joint venture (JV) with China Petroleum & Chemical Corporation (Sinopec), one of the largest integrated energy and chemical companies in China, as per LBI's press release.
Under the non-binding MoU, the JV will construct a new propylene oxide (PO) and styrene monomer (SM) unit in Zhenhai, Ningbo, China to serve that country's domestic market. Once finalized, this JV will build upon the existing LyondellBasell / Sinopec PO/SM joint venture in the same location, which operates under the name Ningbo ZRCC Lyondell Chemical Company Limited.
"Joint ventures in strategic regions are an important part of our growth strategy," said Bob Patel, CEO of LyondellBasell. "As demand for construction materials, packaging and furnishings continues to grow, we see an opportunity to bring together our leading technology with Sinopec's operational capabilities to further serve the Chinese market."
"This cooperation on the second PO / SM unit between Sinopec and LyondellBasell is based on the successful partnership of the first unit," said Dai Houliang, Chairman of Sinopec. "It is in line with China's further opening-up policy, and is another achievement of international cooperation of Sinopec. The products will help meet the increasing demands from the domestic market."
"The formation of this JV with Sinopec, a highly respected Chinese company and an existing PO / SM partner, allows us to take advantage of the fastest growing market in the world for these products," said Torkel Rhenman, Executive Vice President of LyondellBasell. "We see tremendous opportunity to create additional value and grow the presence of LyondellBasell in this very important market."
The new facility is expected to produce 300 kilo tons per annum (KTA) of PO and 600 KTA of SM. Construction of the facility will begin in early 2020 with start-up expected in 2022. The facility will use LyondellBasell's leading PO / SM technology. Products produced will be marketed equally by both companies which will significantly expand their respective participation in the Chinese market for both PO and SM.
According to IHS Markit, China makes up more than 60 percent of the Asian chemicals market demand and represents 40 percent of global chemicals growth over the next decade. PO and SM are core products for LyondellBasell.
LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu. In addition, LyondellBasell is currently building the largest next generation PO / tertiary butyl alcohol (TBA) plant in the world near Houston, Texas.
As MRC reported earlier, Sinopec has just completed the central unit of the Al-Zour refinery project in Kuwait. As the largest refinery in the Middle East, it will make Kuwait the biggest clean oil-producing country in the region with an annual processing capacity of 3,150 tons.
Styrene monomer (SM) is the main feedstock for the production of polystyrene (PS).
According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 411,080 tonnes in the first ten months of 2019, which corresponds to the last year's level. October estimated consumption of PS and styrene plastics rose by 2% year on year, totalling 46,740 tonnes.
China Petroleum & Chemical Corporation or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. Sinopec"s business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products; storage and pipeline transportation of crude oil and natural gas; import, export and import/export agency business of crude oil, natural gas, refined oil products, petrochemicals, and other chemicals.
LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.