German chemical giant BASF and China Petrochemical Corp – also known as Sinopec – one of the country’s leading oil and gas companies, signed a memorandum of understanding on Oct 29 to further strengthen their partnership in upstream and downstream chemical production.
The partners intend to build an additional steam cracker and expand their joint venture, BASF-YPC. A joint feasibility study for the project is expected to be finished this year. Cracking refers to breaking down complex organic molecules.
In addition, the two companies say they will jointly explore new business opportunities in China’s fast-growing battery materials market.
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Joint venture BASF-YPC’s integrated plant in Nanjing, Jiangsu province. Photos Provided to China Daily |
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Dai Houliang (left), chairman and president of Sinopec, and Martin Brudermueller, chairman of the executive board of directors at BASF, sign a memorandum of understanding to expand the companies’ joint venture in China. |
According to the memorandum, BASF-YPC will take a 50 percent stake in a second steam cracker with a capacity of 1 million metric tons of ethylene per year. Sinopec will take the other 50 percent.
Both BASF-YPC and Sinopec will have access to all output from the new steam cracker to develop downstream products.
The basic chemicals provided by the new steam cracker will also enable BASF and Sinopec to expand production capacity at BASF-YPC’s integrated site in Nanjing, Jiangsu province.
Plants are interconnected at the site to utilize products, byproducts and energy in the most efficient way to save costs and minimize environmental impact, according to the companies.
“This additional investment in a new steam cracker and the expansion of our BASF-YPC joint venture underline the strong partnership between Sinopec and BASF, and the commitment to our customers in China,” says Martin Brudermueller, chairman of the executive board of directors at BASF.
Dai Houliang, chairman and president of Sinopec, says: “With the strengthened cooperation between Sinopec and BASF, we will provide high-quality chemicals that can enhance quality of life for general consumers. We aim to create further value by extending this partnership.”
The decision to jointly explore business opportunities in battery materials comes at a time when the rising importance of alternative energy in China, especially in the automotive industry, is leading to a surge in demand for innovative battery materials for a range of applications.
BASF-YPC was founded in 2000, with total investment to date of about $5.2 billion (￡4.1 billion; 4.6 billion euros).
The integrated petrochemicals site in Nanjing produces about 3 million metric tons of chemicals and polymers for the Chinese market annually.
The products serve rapidly growing demand in multiple industries including agriculture, construction, electronics, pharmaceuticals, hygiene, automobiles, and chemical manufacturing.
BASF-YPC posted sales of about 21 billion yuan in 2017 and employed 1,882 people.
(China Daily European Weekly 11/02/2018 page25)