POSM JV Slated for LyondellBasell and Sinopec
LyondellBasell and Sinopec finalize joint venture to manufacture propylene oxide and styrene monomer in China
ROTTERDAM, Netherlands and BEIJING, Jan. 25, 2021 /PRNewswire/ — LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world and the China Petroleum & Chemical Corporation (Sinopec), one of the largest integrated energy companies in China, today announced the signing of an agreement to form a 50:50 joint venture (JV) which will produce propylene oxide (PO) and styrene monomer (SM) in China’s domestic market. First announced on December 23, 2019, the JV will operate under the name Ningbo ZRCC LyondellBasell New Material Company Limited.
“As China’s economy continues to grow, so will demand for propylene oxide and styrene monomer. We are excited to expand our relationship with Sinopec through this joint venture in order to better serve China’s domestic market. Sinopec’s outstanding operational capabilities combined with LyondellBasell’s leading technology is a win-win,” said Torkel Rhenman, Executive Vice President, Intermediates and Derivatives, and Refining.
“Built on the remarkable success of our first Joint Venture, we are very delighted to continue to enhance the important partnership with LyondellBasell for future achievements. The establishment of the new Joint Venture is not only in line with the national drive for further opening-up, but also a vital step for Sinopec to deepen and expand our international operations,” said Yu Baocai, Senior Vice President of Sinopec Corp. “We have great expectations on the new Joint Venture for propelling the economic development of the city of Ningbo to a new level. During the 14th Five-Year Plan period (2021-2025), Sinopec will continue to promote green industrial upgrading and innovative transformation, contributing to the everlasting economic growth of Zhejiang Province and Eastern China, and even the development of the chemical industry in China.”
The JV will construct a new PO and SM unit in Zhenhai Ningbo, China. This new unit will have 275 kilotons per annum (KTA) capacity of PO and 600 KTA capacity of SM. The unit will use LyondellBasell’s leading PO / SM technology. Products produced by the JV will be marketed equally by both partners, significantly expanding their respective participation in the Chinese market for PO and SM. Startup is expected at the end of 2021.
The formation of the JV is subject to approvals by relevant government authorities, including antitrust review by the State Administration for Market Regulation. LyondellBasell expects to make its equity contribution to the JV during the first quarter of 2021.
According to IHS Markit, China accounts for more than 60 percent of chemical market demand in Asia and represents 40 percent of global chemical market growth over the next decade. PO and SM are core products of LyondellBasell and are used in a variety of applications including packaging, building and construction, furnishings and transportation.
LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu.
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world’s largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2020, LyondellBasell was named to Fortune Magazine’s list of the “World’s Most Admired Companies” for the third consecutive year. More information about LyondellBasell can be found at www.lyondellbasell.com.
Sinopec Group is the largest oil and petrochemical products supplier and the second largest oil and gas producer in China, the largest refining company, and the third largest chemical company in the world. Its total number of gas stations ranks the second place in the world.