TIANJIN PETROCHEMICAL COMPLEX, CHINA
www.chemicals-technology.com/projects/tianjin/
This project is an $3 billion
integrated ethylene and downstream derivatives project in
Tianjin, China. The contract was signed in the second half of
June 1997. The pre-feasibility study was completed and the
project proposal submitted to the State Development and Planning
Commission (SDPC) in Nov 1999. The SDPC's approval is still
pending. The owners predict a total project schedule (including
feasibility, construction and start-up) of six to seven years,
and estimate a possible start-up in 2010, although this depends
upon the timing of approval.
The owners of the new plant will be US Dow Chemicals, the Chinese
Sinopec and Tianjin Petrochemical Corporation (a subsidiary of
Sinopec). Dow Chemical will own 50% of the plant and the Chinese
companies the other half. Dow Chemical, based in Midland,
Michigan, has sales of about $30 billion and claims to be the
fifth largest chemical company in the world. It employs more than
50,000 people in 170 countries.
ETHYLENE CRACKER AND DERIVATIVES PLANTS
The first phase of the project involved an ethylene cracker and a
number of derivatives plants. These will include facilities for
manufacturing polyethylene, polystyrene, polyurethane and epoxy.
The ethylene capacity is 650,000t/yr, which Dow wants to increase
to 900,000t/yr, although there is a suggestion that this will not
be enough with Chinese demand rising to 15 million tonnes by
2005. The complex will also includes a polypropylene plant and a
through-production system from chlor-alkali to poly vinyl
chloride (PVC). Polyethylene production is the most common use
for ethylene in China. The advantages of having an ethylene and
polyethylene plant on the same site lie in cost savings and
security of supply - China has a continuing ethylene shortage.
CHINESE PETROCHEMICAL INDUSTRY
The Chinese petrochemicals industry still has some residual
legacies from Communism. One of these is its continuing status as
one of the "commanding heights" of the economy. China
remains a large net importer of petrochemicals, partly because of
its underdeveloped industry, and partly because of its soaring
demand. A second legacy is the Five Year plan. The Tianjin
project was part of one of China's six main ethylene projects for
the Nineth Five Year Plan (for 1996-2000), which also included a
major ethylene joint venture with BP in Shanghai.
Due to a governmental call for western investment, the expansion
of the Chinese petrochemicals sector is now being undertaken with
the enthusiastic support of numerous multi-nationals, such as
BASF, Chevron, BP. However, it is noticeable that such
cooperation always takes place through joint ventures, in order
to transfer expertise and profits as well as to ensure a measure
of local control.
SINOPEC
The China National Petrochemical Corporation (Sinopec) was
founded in 1983, and is the largest petrochemical supplier in
China. It is a state-owned corporation with 38 major oil refining
and petrochemical operations and has 1,200 processing units in
China. The company claims to account 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 refined oil, petrochemicals and synthetic fibres.
Sinopec has already ensured that some of its joint ventures are
listed, although this does not include the Tianjin Petrochemical
Company. It is rumoured that Sinopec itself may move closer to an
overseas listing in Hong Kong, London and New York. While this
would improve the company's access to capital, it would also
demand much stricter standards of accounting than the firm has
hitherto enjoyed. Thus, the company could expect pressure to
achieve lower debts and liabilities. This would be in line with
its existing commitments to achieve greater profitability, but it
may have difficult implications in terms of non-profitable
operations, pension liabilities and corporate debts.
June 7, 2004 Dow
Jones News Service
Sabic In Talks With Sinopec On Investing In Ethylene Proj
Saudi Arabia Basic Industry Corp. is in talks with China
Petroleum & Chemical Corp. (SNP), or Sinopec Corp., on taking
a stake in a major ethylene project in northern China's Tianjin
city, a Sinopec official said Friday.
He said Sabic expressed an interest in taking a stake in Sinopec's Tianjin ethylene project after Dow Chemical Co. (DOW) decided to
withdraw.
Dow Chemical decided not to invest in the project after many
years of negotiations, the Sinopec official said, without giving
a reason. As reported, Dow Chemical said the 600,000 tons/year
ethylene project was not big enough to be economically feasible.
Sabic's executive vice president, Abdullah Nojaidi, expressed
Sabic's intention to invest in the Tianjin project when meeting
with Sinopec president Wang Jiming in April this year.
The Sinopec official said under the current planning, the
capacity of Tianjin's ethylene cracker will be larger than the
earlier planned 600,000 metric tons a year. China-based industry
officials said the current planned size could be 800,000 to 1
million tons/year.
Two weeks ago, Sabic's Asia Pacific chairman, Khalid Al-Mana,
said his company was in talks to undertake two major
petrochemical projects in China as part of its global expansion.
China-based industry officials said Sabic's other projects in
China could involve expanding an ethylene cracker and building
other petrochemical production units in northeastern China's
Dalian city.
2007/3/9 Reuters
SABIC's $5 bln
China plant put back a year -sources
Private Chinese firm Shide and Saudi Basic Industries Corp.
(SABIC) may have to wait another year for approval on a
long-delayed $5.2 billion petrochemical complex, sources familiar
with the situation said on Thursday.
SABIC, the world's largest petrochemical company by market value,
said last month it may re-locate the complex, envisioned for
northeast China's Dalian, if Beijing kept putting off approval
for a project proposed as far back as 2003.
SABIC and Shide -- which makes everything from appliances to
chemical building materials -- have been in talks for three years
on the complex, now seen including a 10 million tonnes per year
(tpy) oil refinery, a 1 million tpy ethylene plant and a 300,000
tonne oil terminal.
If it goes ahead, it will be China's first petrochemical project
built by a private company, breaking a monolopy by domestic
oil-producing leaders PetroChina and Sinopec Corp.
It would also give SABIC a coveted foothold in the world's
second-largest oil consumer. The Saudi giant hopes China will
help it achieve a goal of almost doubling output to 100 million
tonnes by 2015.
Several industry sources told Reuters the government was holding
off on the project because it had approved an 800,000 tpy naphtha
cracker last year for PetroChina's Fushun subsidiary and was in
no rush to allow another one so soon.
Fushun and Dalian are in northeastern Liaoning province.
"All we are waiting for is the approval of the National
Development and Reform Commission and the State Council," a
source close to the situation told Reuters, adding the project
had undergone engineering, environmental and land assessments.
The Commission is China's top economic planning agency, and the
State Council is the country's cabinet.
"The government postponed the project probably because they
didn't want to add too much ethylene capacity in one province in
such a short time," he said.
"But I can't see any reason why the government will not
approve this project."
China's booming economy has made it Asia's largest importer of
petrochemicals, sourcing 60 percent of its requirements from
overseas. The country is already building petrochemical plants
with BP Plc, BASF AG and Royal Dutch Shell, each costing $2.7
billion to $4.3 billion.
Resource-rich Shaanxi province is also seeking to strike a
landmark alliance with PetroChina to build a $2.6 billion
petrochemical plant with a 1 million tpy capacity.
SABIC said last April the project was on track, after Chinese
President Hu Jintao stopped at the firm's headquarters during a
visit to Saudi Arabia, which in 2006 shipped 23.87 million tonnes
of crude to China as its largest oil supplier.
Then in February, SABIC's chairman surprised the industry when he
said the company might go elsewhere.
"I don't think SABIC will give it up that easily," the
source said.
Both companies and local governments are lobbying hard for
approval. A government official told Reuters the NDRC was
studying the plan.
It typically takes four years to prepare and build a complex once
it gets the go-ahead, the sources said.
"If the government can approve it next year, when it starts
up in 2012, the plant is expected to meet a rising cycle for
petrochemicals."
Shide would hold 50 percent of the project -- unusual for a
private firm in the Communist country's oil sector given the size
of the investment -- while SABIC would hold the other half.
Industry officials have told Reuters that China had agreed to
increase purchases of Saudi crude oil in 2007 by about 44,000
barrels per day, or 9 percent, from last year.
Saudi Aramco, SABIC's affiliate, recently agreed with Sinopec and
Exxon Mobil Corp. to expand an existing refinery in the
southeastern province of Fujian.
SABIC to join hands with Sinopec over new China ethylene project
Saudi Basic Industries
Corporation was likely to ink an agreement with China's
state-owned oil and petrochemical major Sinopec to invest $ 1
billion in a new 1 million mt/year ethylene plant in North
China's Tianjin,
China's Ministry of Commerce said May 22. The proposal had yet to
be finalized, an official from SABIC Shanghai said Friday.
Construction of the 1-mil mt/year Tianjin ethylene project kicked
off in June 2006, and was scheduled to come onstream by September
2009, according to plans made by Tianjin Petrochemical, a
subsidiary of Sinopec. Sinopec was set to invest Yuan 20.84
billion to build the new 1 million mt/year ethylene plant.
Sinopec would also revamp a 2.5 million mt/year crude
distillation unit to 10 million mt/year (201,000 b/d), which
would be capable of processing imported sour crude oil.
Other new units to be built at the complex included a 2 million
mt/year hydrocracker, a 2.6 million mt/year delayed coker, a 3.8
million mt/year gasoil hydrofining plant, a 800,000 mt/year jet
fuel hydrofining plant, a 220,000 mt/year sulphur recovery plant,
a 300,000
mt/year low-density polyethylene unit, and a 300,000 mt/year
high-density polyethylene unit, amongst others.
Separately, Prince Saud bin Abdullah bin Thenayan Al-Saud,
Chairman of SABIC opened two new offices for SABIC in Beijing and
Shenzhen in China, according to a news release on the company's
website on May 23. "In combination with SABIC's existing
offices in Shanghai and Hong Kong, SABIC has strengthened its
position in the world's most important and fastest growing
polymers market and can now provide even stronger support locally
to its customers in China," SABIC said. "China is
currently SABIC's most strategically important export market
globally and is also the fastest growing polymers market in the
world. Over the next three years most of SABIC's new
petrochemical capacity will be allocated to the rapidly expanding
Asian markets, of which China is the most important."