Issue Date: June 30, 2008
Middle East Action In China
Led by China's vice president, Xi Jinping, a delegation of top Chinese government and business officials visited the Middle East last week to sign agreements concerning the construction of petrochemical and plastics facilities in China.
Saudi Basic Industries Corp. said it would boost its participation in a petrochemical complex already under construction in Tianjin and scheduled to open in 2009. SABIC owns half of the project through a 50-50 joint venture with Sinopec. When SABIC first announced its participation in January, the two sides expected that the project would cost $1.7 billion. The partners now plan to raise their investment to $2.5 billion to include addition of a polycarbonate unit.
SABIC gained polycarbonate expertise when it acquired GE Plastics last fall for $11.6 billion. Just before the acquisition, GE had shelved plans to build a polycarbonate plant in China.
In Qatar, the ruling emir's heir apparent, Sheikh Tamim Bin Hamad Al-Thani, signed a letter of intent with PetroChina and Shell to build an oil refinery and petrochemical project somewhere in China. It's not clear where the plants would be or how much they would cost, but the partners expect that PetroChina would have a 51.0% stake in the venture and Qatar Petroleum and Shell would each own 24.5%.
Middle East firms have been active in China's plastics and petrochemical industries for some time. Saudi Aramco is taking part in a joint-venture refinery and petrochemical complex in Fujian. And in Guangdong, Kuwait Petroleum and Sinopec are considering the construction of an $8 billion petrochemical and refining complex.
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