News Code : 43809

Under the MOU, the newly formed JV will establish a new propylene oxide (PO) and styrene monomer (SM) unit in China. The unit is expected to produce 300 KTA of PO and 600 KTA of SM.

Petrotahlil :Lyondell Basell has recently announced that it has signed a Memorandum of Understanding (MOU) to form a 50:50 joint venture (JV) with China Petroleum & Chemical Corporation (Sinopec).

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 finalised, this JV will build upon the existing Lyondell Basell / Sinopec PO / SM joint venture in the same location, which operates under the name Ningbo ZRCC Lyondell Chemical Company.

"Joint ventures in strategic regions are an important part of our growth strategy," said Bob Patel, CEO of Lyondell Basell. "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 Lyondell Basell 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 Lyondell Basell. "We see tremendous opportunity to create additional value and grow the presence of Lyondell Basell in this very important market."

The new facility is expected to produce 300 kilo tonnes 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 Lyondell Basell'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 per cent of the Asian chemicals market demand and represents 40 per cent of global chemicals growth over the next decade. PO and SM are core products for Lyondell Basell.

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