Saudi Arabia to Invest $1 Billion in Chinese Ethylene Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--At the International Oil Conference in Jeddah, Saudi Arabia, China National Petroleum & Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing) and Saudi Arabia Basic Industries Corporation (SABIC) signed an agreement regarding SABIC's investment in Sinopec Tianjin Petrochemical's 1 million-ton-per-year ethylene project.

The Tianjin ethylene project is the first large-scale project to be approved after the Tianjin Binhai New Development Zone was listed in China's National Development Strategy. It is also the largest project ever undertaken by Tianjin, with a total investment value of $3.95 billion. As early as June of last year, SABIC and Sinopec reached an initial agreement that SABIC would invest $1 billion into the ethylene project.

Construction of the plant and auxiliary facilities started June 2006 and should be completed by the end of this year. Upon completion, the total ethylene capacity at Tianjin Petrochemical will reach 1.2 million tons per annum. With $45 billion of assets, SABIC is the Middle East's most valuable listed company and one of world's ten largest petrochemical producers.

In February, Sinopec and SABIC reached an agreement regarding cooperation on the downstream business at this refining and petrochemical integrated project. The two parties signed agreed to establish a joint venture company to manufacture 600,000 tons per year of polyethylene and 400,000 tons per year of glycol. All the required raw materials will be provided by the Tianjin ethylene project.

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