SK Energy & SINOPEC sign JV to set up an ethylene plant

30 May '08

3 min read

SK Energy, one of the largest refiners in Asia, will form a joint venture with China Petroleum & Chemical Corporation (SINOPEC) in building a large-scale petrochemical production complex in Wuhan, Hubei Province, China

SK Energy, South Korea's largest refiner, announced that it will be the first major Asian energy company to partner with SINOPEC, the largest energy company in China, in building an ethylene production plant, which is already under construction with annual capacity of 800,000 tons.

The petrochemical complex will enter into operation by the end of 2011, producing key petrochemical products including 300,000 tons of high density polyethylene (HDPE), 300,000 tons of linear low density polyethylene (LLDPE), 400,000 tons of polypropylene (PP) on top of the 800,000-ton capacity of ethylene.

Both parties also signed a framework agreement on establishment of the joint venture in presence of the Mr. Youn Ho Lee, Minister of Knowledge & Economy of Korea, Mr. Xiuhong Ma, Deputy Minister of Commerce of China, Mr. Tianpu Wang, President of SINOPEC, and Mr. Heon-Cheol Shin, Vice Chairman & CEO of SK Energy at Xinshijirihang Hotel in Beijing.

According to the agreement, SK Energy and SINOPEC will establish a joint venture, in which SK Energy will hold 35% equity stake. SK Energy and SINOPEC plan to consummate a master contract of the joint venture by the end of this year.

SK Energy's participation in the joint venture symbolizes the company's greater focus and realization of its unique 'China Insider Strategy' – SK Group's strategic growth initiative in China, with an emphasis on the importance of localization and the operation as a truly local player. Such strategy will also further accelerate the Group's global management drive in expanded export and strengthened overseas business.

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