BASF Inks Deal With SINOPECDocuments to officially form the Nanjing Yangzi-BASF Integrated Petrochemical Site (IPS) project, one of the largest Sino-foreign joint ventures, were signed Friday in Berlin, capital of Germany.The contract was inked by Li Yizhong, chairman of China Petroleum & Chemical Corporation (SINOPEC Corp), and Jurgen Strube, chairman of BASF AG. Chinese Premier Zhu Rongji and German Chancellor Gerhard Schroeder attended the signing ceremony. According to SINOPEC sources, the project will be China's first joint venture comprising a world scale steam cracker. As a result of this venture BASF will become the largest foreign chemical investor in China. The total investment in the IPS project will reach US$2.65 billion. SINOPEC Corp and BASF will each hold a 50 per cent stake, according to the contract. Located at Nanjing, capital of East China's Jiangsu Province, the joint venture, named BASF-YPC Co Ltd, will be built backing on current SINOPEC Yangzi Petrochemical Co Ltd (YPC). A news release from SINOPEC Corp said the Chinese Government officially approved the feasibility study report of the project on June 27. SINOPEC Corp and BASF are planning to start the preparations for construction of the project this year. Construction is expected to complete by the end of 2004. With naphtha as raw material, the project will comprise of a world scale steam cracker with an annual production capacity of 600,000 metric tons of ethylene. Including other eight sets of petrochemical equipment, the project will produce 1.77 million tons of high-quality chemical products per year to meet the mounting Chinese market demand and take the place of imports. Moreover, the IPS will also include an independent public engineering centre constructed and run by a third partner. The public centre will use high sulphur-bearing coal as fuel and adopt updated technology to provide electricity, heating and industrially used gas. Industry insiders said the project will hone SINOPEC Corp's competitiveness and strengthen BASF's presence in China's potential chemical market. It is expected to play an active role in promoting the adjustment of industrial structure in East China. With sales in 1999 of 29.5 billion euros (US$28.02 billion) and a workforce of 105,000 employees, BASF is one of the world's top chemical companies. SINOPEC Corp was founded in February this year by China Petrochemical Corp. It collects all core assets of its parent company, including petroleum production, processing, petrochemical sectors as well as refined oil sales. |
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