Ethylene Crackers Start up in China

BUSINESS IN ASIA

Two major petrochemical complexes operated by China Petroleum & Chemicals (Sinopec) and foreign partners BP and BASF have initiated commercial delivery of all their products over the past few weeks. Construction of both complexes was completed in December.

Secco--a $2.7 billion joint venture in Shanghai between BP (50%), Sinopec (30%), and Sinopec subsidiary Shanghai Petrochemical (20%)--held a celebration last week to highlight that the complex came on-line earlier than scheduled and that there were no fatalities during construction.

The complex's 900,000-metric-ton-per-year ethylene cracker, the largest in China, started up in March and is operating smoothly, BP says. Downstream units produce polyethylene, polypropylene, polystyrene, and acrylonitrile. Innovene, BP's soon-to-be-spun-off petrochemical business, is expected to hold a significant interest in the joint venture.

BASF-YPC, a 50-50 joint venture between BASF and Sinopec worth $2.9 billion, has fired up all its facilities in Nanjing. With a 600,000-metric-ton cracker at its core, the complex produces aromatics, polyethylene, ethylene glycol, oxo alcohols, acrylic acid and esters, formic acid, propionic acid, methylamines, and dimethylformamide. BASF bought the cracker at a discount from Shaw Stone & Webster, which had meant to deliver it to TPPI, an Indonesian venture that went bankrupt.

Commercial operations at Secco started about three months earlier than its managers expected, but the timing is in line with BP's expectations in 1996--before Secco was formed--that the venture would start operations this year. BASF, however, had expected back in 1997 to bring its Nanjing complex on-line in 2003. Both ventures received regulatory approvals later than their managers had hoped.

In southern China near Hong Kong, the petrochemical joint venture between Shell and China National Offshore Oil Corp. is scheduled to come on-line at the end of this year.