The Financial Express March 29, 2002
BP, Sinopec Launch Petrochemical Plant In China Shanghai, March 28: Oil titan BP and China's Sinopec Corp launched a massive $2.7 billion petrochemical complex on Thursday, hoping slumping product prices would recover by 2005 when the plant goes into operation. The complex, BP's largest single petrochemical investment in the world, would begin pumping out 900,000 tonnes per year (TPY) of ethylene long after the global petrochemical industry emerged from the painful downturn of the past two years, executives said. "It's been perhaps more dire than a slump. These have been awful market conditions," said managing director for Asia, Byron Grote. "We're seeing early signs of improved economic activity and therefore improved demand for petrochemical products." BP and Sinopec officials estimated China would still need to import 40 per cent of its ethylene by 2005 - versus about half now - boding well for the complex's ethylene-based products. "We're confident that conditions will be better by the time this petrochemical complex comes onstream in three years," Mr Grote told a news conference in Shanghai. BP holds 50 per cent in the joint venture company, Shanghai SECCO, while Sinopec has 30 per cent and its subsidiary Shanghai Petrochemical owns 20 per cent. It will be China's largest ethylene cracker and one of the world's biggest. By 2005, China is projected to consume 13 million tonnes per year of ethylene, the building block of plastics and other chemicals, Sinopec's Chairman Li Yizhong said. But domestic capacity would be just 8.35 million tonnes, he estimated. Presently low petrochemical usage in China also indicated the potential for growth. Li forecast the average Chinese uses 16 kilograms (35.27 lb) of plastics a year, versus a worldwide mean of about 35 kilograms. "We witnessed a cyclical low in 2001. This year it seems prices are picking up pace," he told reporters. Sinopec is expected to report a sharp decline in 2001 profits on Thursday, hit by sharp drops in crude oil and ethylene prices. - Reuters © 2002: Indian Express Newspapers (Bombay) Ltd. All rights reserved throughout the world.
