LyondellBasell Industries is starting a new joint venture and has signed an memorandum of understanding (MOU) to build a petrochemical and plastics complex in northeast China, Reuters reported.
The partnership is with LyondellBasell and Liaoning Bora Enterprise Group to create a range of plastics. The consortium may invest as much as $12 billion over the next 10 years in a series of petrochemical projects in Liaoning’s Panjin city.
LyondellBasell will take a 50% stake in the chemical projects being built by the Chinese firm.
Among the proposed phase-one investment with a total cost of $2.54 billion are the production of 800,000 tonnes per year (tpy) of polyethylene, 600,000 tpy polypropylene and 350,000 tpy styrene.
"China is the largest, fastest-growing market in the world for our core products," said LyondellBasell Chief Executive Bob Patel. "The formation of this JV with a well-respected Chinese company allows us to increase our flexibility to produce these products closer to the customer. We see tremendous opportunity to create additional value and potentially grow further in this very important market."
The company cited estimates that China will make up more than 60 percent of the Asian chemicals market and 40 percent of global chemicals growth over the next decade.
LyondellBasell currently operates three polypropylene compounding facilities in China located in Guangzhou, Suzhou and Dalian.
Reporting by Chen Aizhu; Editing by Alexander Smith and David Gregorio