LyondellBasell is taking a major plunge into China. It is forming a joint venture with the Chinese company Liaoning Bora Enterprise Group for an integrated petrochemical project in Panjin, China.
Chinese state news service Xinhua reports that the two companies envisage investing $12 billion over the next decade.
The first phase of the project, which will now be a 50-50 joint venture, is already under construction. It entails a 1.1 million-metric-tons-per-year ethylene cracker, as well as two polypropylene units and a polyethylene plant. The polypropylene plants will use LyondellBasell’s Spheripol and Spherizone processes and the polyethylene unit will use its Hostalen ACP technology.
According to Xinhua, this first phase will cost $2.5 billion. It will also include a styrene plant.
LyondellBasell signed licensing agreements with Liaoning Bora for the polyolefins plants back in 2017. At the time, the companies said the project would have annual capacity of 600,000 tons of polypropylene and 350,000 tons of polyethylene.
Until now, LyondellBasell’s presence in China has been modest. It operates three polypropylene compounding plants in the country.
“China is the largest, fastest growing market for our core products,” said LyondellBasell CEO Bob Patel in a statement. “The formation of this joint venture with a well-respected Chinese company allows us to increase our flexibility to produce these products closer to the customer.”
The LyondellBasell project is just the latest in a spate of Chinese projects that large foreign chemical makers are planning. BASF is investing $10 billion in a new wholly-owned petrochemical complex in Guangdong. It is also planning to expand its joint venture with Sinopec in Nanjing.
In addition, ExxonMobil is developing a project for a new ethylene cracker in Daya Bay, and SABIC is looking to build a new plant in Fujian.