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Four firms ink JV for naphtha crackers in China
20
Aug '11
Four Taiwanese petrochemical companies - LCY Chemical, Ho Tung Chemical, USI Corp. and China Petrochemical Development – have inked a deal with mainland China's Sinopec Group and Fujian provincial government to invest US$ 4.5 billion or around NT$ 130 billion to set up an oil refinery and a naphtha cracking complex in Gulei in Zhangzhou in Fujian province.

The consortium of the four Taiwanese firms is led by Founder of Ho Tung Chemical Chen Wu-hsiung, who is also the Chairman of the Petrochemical Industry Association of Taiwan.

The naphtha cracking plant will be a joint venture with both the Chinese and Taiwanese sides contributing 50 percent or equal share of the capital. However, the project would need authorization of the Governments on both sides of Taiwan Strait.

Taiwan has not yet allowed investment in naphtha cracking and oil refining operation in mainland China. In view of the same, the Ministry of Economic Affairs (MOEA) has released a statement directing the local businesses to adhere to the norms for investment in China.

Initially the four firms proposed to invest in Taiwan's Kuokuang Petrochemical Project, but it was called off following strong resistance from environmentalists. Subsequently, the firms turned to mainland China with an intention to exploit the immense potential of market there.

Alongside naphtha crackers with a capacity to produce 1.2 million metric tons of ethylene per annum, also proposed to be set up as a part of the plant are an oil refinery with a capacity to process 16 million metric tons of crude oil per annum and 26 mid and downstream petrochemical firms.

Once the project gets sanctioned, it is likely to be completed within three years and commence operations in 2014.

Fibre2fashion News Desk - India

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