China Petroleum & Chemical Corporation (Sinopec Corp) said that its general manager Su Shulin recently singed a framework agreement to allow Saudi Basic Industries Corp. (SABIC) to buy into an ethylene derivatives project in Tianjin, North China. In January, SABIC announced that it inked an agreement with Sinopec Corp. to jointly build an ethylene derivatives plant in China with up to $1.7 billion. The plant was scheduled for completion before September 2009, and would be capable of turning out ethylene derivatives of 1 million tons a year, according to SABIC, one of the world's leading manufacturers of chemicals, fertilizers, plastics and metals. But SABIC did not disclose the location of the plant at that time. Insiders guessed that the plant would possibly be the 1-million-ton ethylene project in Tianjin, a port city close to Beijing. On June 23, Sinopec Corp., Asia's biggest oil refiner, posted a statement on its website, which serves as confirmation of the guess. Moreover, SABIC said that the total investment in the plant would rise to $2.5 billion. The project started construction in June 2006. With an annual oil processing capacity of 12.5 million tons, it will turn out 12 million tons of oil products, petrochemicals, and chemical fiber products a year. In the petrochemical industry, Sinopec Corp has been seeking expansion in recent years. In April 2008, it started the preparations for a 1-million-ton ethylene project in the southern province of Hainan. Previously, the oil refiner signed a framework agreement upon the cooperation with the provincial government of Hainan. Hainan Standing Deputy Governor Fang Xiaoyu said that they would strive to commence the construction of the project at the end of the eleventh Five-year Plan Period (2006 to 2010). Later, Sinopec Corp. was reported in May 2008 to partner with the South Korean refining giant SK Energy Co., Ltd. in its 800,000-ton ethylene project in the central Chinese city of Wuhan. With a total investment of 14.67 billion yuan, the plant started construction in 2007 and is scheduled to be completed in 2010. SK Energy plans to spend 1 trillion won, or about 6.7 yuan billion, for a 35 percent stake in the plant. Its sales revenue in China is expected to jump to more than 3 trillion won after operation of the plant, up from the current over 200 billion won.
