Petrotahlil :Houston petrochemical maker LyondellBasell is starting a new joint venture to build a $2.5 billion petrochemical and plastics complex in China.
The 50-50 partnership is with the Liaoning Bora Enterprise Group to create a range of plastics in the northeastern Chinese city Panjin. The joint venture could invest up to $12 billion over 10 years through additional phases, the companies said.
There's been a boom of petrochemical and plastics manufacturing expansion along the Texas and Louisiana Gulf Coasts in recent years, including from LyondellBasell, to take advantage of cheap shale gas to build chemicals and plastics for growing Asian populations, including China.
But there's also a surge of growth within China as well.
"China is the largest, fastest-growing market in the world for our core products," said LyondellBasell Chief Executive Bob Patel. "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."
The company cited estimates that China will make up more than 60 percent of the Asian chemicals market and 40 percent of global chemicals growth over the next decade.
This new complex in Panjin will include a 1.1 million ton ethylene cracker to manufacture the primary building blocks of plastics. Using specific LyondellBasell technologies, then the plant will create the the world's most common plastics, polyethylene and polypropylene, to be used in a large range of products, including pipe, plastic containers, fuel tanks and agricultural films.
The complex will manufacture 800,000 tons per year of polyethylene, 600,000 tons polypropylene and 350,000 tons of styrene, the companies said.
Liaoning Bora has already started construction and the project is expected to be completed by the end of 2020.
LyondellBasell already operates three existing polypropylene facilities in China in Guangzhou, Suzhou and Dalian.
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