Lyondell Joins ZRCC in World-Scale Petrochem Plant Project in China

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Researched by Industrial Info Resources (Sugar Land, Texas). A world-scale propylene oxide/styrene monomer (POSM) manufacturing project, to be built in Ningbo, China, has received final approval from the Chinese government. Lyondell Chemical Company (NYSE:LYO) (Houston, Texas) and Sinopec Zhenhai Refining & Chemical Company (ZRCC) are partners in the plant project that will be one of the lowest cost POSM plants in the world.

The new plant will have an annual design capacity of 274,000 tons per annum (tpa) of PO and 602,0000 tpa of styrene. Lyondell estimates that worldwide demand for PO was approximately 6.5 million tons in 2006.

Lyondell will contribute its POSM technology and its overall operating and technical experience in exchange for a share of the PO profitability from the plant. ZRCC will supply the raw material feed from its planned one million tpa olefins plant in Ningbo, on which construction started in November 2006. Construction is scheduled for completion in 2009. The companies will market the entire PO output manufactured at the plant jointly.

Lyondell’s NOC (Nihon Oxirane Company) in partnership with Sumitomo Chemical (TSE:4005) (Tokyo, Japan) operates a POSM plant in Chiba, Japan and will also market PO from Sumitomo’s Chiba plant and from the Japanese company’s plant in Rabigh, Saudi Arabia that is currently under construction. The new Ningbo plant will top the list of global POSM assets along with Lyondell’s plants near Houston and Rotterdam.

Dan Smith, the company’s president and CEO, said that the Ningbo location on the eastern coast of China, across the Hangzhou Bay from Shanghai, provided a perfect platform for Lyondell and ZRCC to serve the region. “ZRCC currently operates the largest and most efficient refinery in China, and we are pleased to be part of a site that will soon become one of the largest integrated petrochemical complexes in the region,” said Smith.

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