Dow, Sinopec and Tianjin Petrochemical sign LoI for $ 3 bn petrochemical project

Jul 14, 1997 02:00 AM

June 23, 1997 The Dow Chemical Company, China Petrochemical Corporation (Sinopec) and Tianjin Petrochemical Corporation (a subsidiary of Sinopec), have signed a Letter of Intent to jointly develop an integrated ethylene and down stream derivatives project in Tianjin, China. The signing ceremony took place at the Great Hall of the People in Beijing.
The first phase of the project will consist of an ethylene cracker along with a number of derivatives plants, such as polyethylene, polystyrene, polyurethane and epoxy. The pre-feasibility study report and project proposal are under development. The complex is expected to start up in the beginning of the 21st century.
The complex has a projected production capacity of 600,000 tpy of ethylene, and facilities to make related products such as polyethylene and resin. Each partner is expected to hold 50 % of the equity of the $ 3 bn project. The venture, one of China's 6 major ethylene projects planned for the 1996-2000 period, will enhance the position of the petrochemical industry as the nation's economic pillar. All six projects will each be capable of producing 600,000 tons or more of ethylene yearly.
China is poised to lift the total production capacity of ethylene to 5 mm tpy by 2000, a sharp boost from 3 million tons in 1996. Last year alone, China imported 6.5 million tons of polyester, 1.5 million tons of chemical fibre and 400,000 tons of synthetic fibre.
Speaking at the signing ceremony, Dow's President and Chief Executive Officer, Mr. William S. Stavropoulos, said that the project is a clear demonstration of Dow's commitment to the China market and how the company intends to create value in Asia Pacific. Sinopec is the largest supplier of petrochemical products in China and is influential in China's petrochemical industry. Sinopec brings a thorough understanding of China and its markets, as well as its high quality human resources. Dow brings international experience, world-class technologies and established products.
Sinopec's President, Mr. Sheng Huaren, said that the signing of the Letter of Intent signifies a new development in the friendly co-operation between Dow and Sinopec. "The project under study is one that is world-scale, high tech, highly cost-effective and world competitive. Dow is one of the world's renowned chemical companies, especially in advanced plastics production technology, research and development, and is a leader in the world market. I believe that our mutual co-operation will help to enhance the technology of our country's petrochemical industry, our management standards and enable the development of our industry."

The Dow Chemical Company, headquartered in Midland, Michigan, U.S.A., is the fifth largest chemical company in the world, with annual sales of more than $ 20 billion. Dow manufactures and supplies more than 2,400 product families, including chemicals, plastics, energy, agricultural products, consumer goods and environmental services to customers in 157 countries around the world, and employs approximately 40,300 people world-wide.

Sinopec is the largest petrochemical supplier in China and is mainly engaged in the production and sales of petroleum and energy based refining, petrochemicals, synthetic fibre, synthetic rubber, synthetic resins, fertiliser, and basic organic chemical raw materials. It has 25 giant and 13 large oil refining, petrochemical, synthetic fibre and fertiliser corporations. Sales in 1996 amounted to $ 27 billion. The company accounts for 85 % of the country's crude oil processing capacity, and 82 % of the nation's ethylene capacity. Tianjin Petrochemical Corporation is one of the main subsidiaries of Sinopec and is mainly engaged in the production and sales of oil refinery, petrochemicals and synthetic fibres. The company has about 30 years' experience in production.

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