Sinopec to Build 800,000-Ton Ethylene Project in Hainan Province

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Petroleum & Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing) will build an 800,000-ton-per-year ethylene project in central China's Hainan Province. The company will invest $4.3 billion in this and other projects to form the largest petrochemical base in central China. South Korea's SK Chemicals Company (SEO:006120) is said to have signed an agreement with Sinopec to hold 35% of the shares.

The project is located in Wuhan's Chemical Industrial Zone, 30 kilometers away from downtown Wuhan, and will cover 89 square kilometers, half of which will be used for forestation and lake. Sinopec laid the foundation of the project on December 18. Construction will begin in August, and is divided into four phases:

•2008 (preparation period) - fully start the project and accept bid for downstream and public facilities
•2009 (speeding up period) - build underground pipelines, pile foundation engineering and other civil engineering
•2010 (full operation period) - civil engineering finished; heat and power cogeneration item finished in June
•2011 (finishing period) - entire project finished, trial run in first half of the year

The ethylene project is part of a refinery renovation project. Phase I of the renovation is finished.

According to the feasibility report approved by the National Development and Reform Commission, Sinopec will invest $2 billion in the ethylene project. Equipment includes:

•An 800,000-ton-per-year ethylene cracking unit
•A 500,000-ton-per-year pyrolysis gasoline hydrogenation unit
•A 400,000-ton-per-year aromatics extraction unit
•A 120,000-ton-per-year butadiene extraction unit
•A 300,000-ton per-year linear low density polyethylene unit
•A 400,000-ton per-year polypropylene unit
•A 300,000-ton per-year glycol unit

A 10 million-ton-per-year oil pipeline to Wuhan is also under construction.

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