The marriage of Lyondell’s industry-leading propylene oxide (PO) technology with raw materials provided by Sinopec Zhenhai Refining & Chemical Co., Ltd. (ZRCC) has created one of the world’s largest, low-cost propylene oxide/styrene monomer (POSM) ventures.
Earlier this year, Lyondell and ZRCC received final government approval to construct a world-scale POSM manufacturing facility in Ningbo, China, across the Hangzhou Bay from Shanghai. The deal was ceremoniously sealed in April at an inauguration ceremony in Beijing.
Lyondell executives celebrated the joint venture at the inauguration ceremony conducted by ZRCC officers and Chinese dignitaries.
With demand for propylene oxide in China growing rapidly, this world-scale plant with its leading technology and ideal location on the eastern coast of China provides a perfect platform for Lyondell and ZRCC to serve the region," said Lyondell Chairman, President and Chief Executive Officer Dan F. Smith.
"ZRCC currently operates the largest and most efficient refinery in China, and we are pleased to be a part of a site that soon will become one of the largest integrated petrochemical complexes in the region."
Lyondell is the world's PO technology leader with more than 40 years of experience. The venture capitalizes on Lyondell’s POSM technology, both companies' operating experience and the raw materials from ZRCC's future 1 million tons-per-year olefins complex, which it began building in Ningbo in November 2006.
"With this project, we are expanding our position in an important market and continuing to grow efficiently in a manner consistent with our financial strategy and commitment to debt reduction," Smith said.
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. The parties will jointly market the PO manufactured by the new facility, expected to be completed in 2009.
Along with Lyondell's POSM plants near Houston and Rotterdam, the Ningbo facility will top the list of the world's largest POSM assets. The new plant will have an annual design capacity of 274,000 metric tons (604 million pounds) of PO and 602,000 metric tons (1.3 billion pounds) of styrene. Lyondell estimates that worldwide demand for PO was approximately 6.5 million metric tons (14.3 billion pounds) in 2006.