Sinopec and BASF to Invest $1.5 Billion for Expansion of Joint Venture Project in Nanjing

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Petroleum & Chemical Company Limited (SHA: 600028) (Sinopec) (Beijing) and BASF (China) Limited (Beijing), a subsidiary of BASF SE (OTC:BASFY) (Ludwigshafen, Germany), kicked off the expansion project for their joint venture, BASF-Yangtze Petrochemical Company Limited (BYC) (Nanjing, Jiangsu), in Nanjing on September 28. According to the schedule, both parties will invest $1.5 billion to produce downstream chemical intermediates and special chemical products for the increasing demand in the Chinese market.

BYC is a 50:50 joint venture established by Yangtze Petrochemical Company (Nanjing, Jiangsu), a subsidiary of Sinopec, and BASF. The venture's ethylene project is one of the largest Sino-foreign joint venture petrochemical projects in China. The Phase I project has a total investment of about $2.9 billion, and was put into commercial operation in June 2005. Following the successful implementation of the Phase I project, the feasibility study for BYC's Phase II expansion project received approval from the Chinese government on July 1, 2009.

The expansion will be focused more on special chemical products, according to Doctor Bo Mule, member of the BASF executive commission, which is responsible for business in the Asia-Pacific region. Products from the Phase II expansion will be applied widely in sectors such as agriculture, building, electronics, medicine, automobile, chemical manufacturing and special chemical products.

"BYC joint venture project is the symbol of the faithful cooperation between Sinopec and BASF, two top-500 enterprises in the world," said Dai Houliang, board director and senior vice president of Sinopec. BYC currently supplies more than 2 million tons of high-quality chemicals and polymers to the rapid expansion market in China every year.

The expansion project is expected to begin operations in 2011.

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