Sabic, Sinopec sign petrochemical deal

Saudi Basic Industries Corporation (Sabic) and Sinopec Corp. have agreed to invest more than US$1 billion in a petrochemical plant in Chinas northern city of Tianjin. Under the preliminary agreement signed in May, which needs Beijing’s final approval, the companies will build a 1 million ton-per-year naphtha cracker to produce ethylene, a key building block for petrochemicals. The companies will share the US$1 billion investment on an equal basis. The facilities form a key part of a US$3.1 billion investment program planned by Sinopec, which also includes an expanded refinery and other downstream petrochemical units. Sinopec and PetroChina plan to add at least half a dozen huge crackers, costing some US$20 billion by 2010, to meet double-digit growth in petrochemical consumption. (June 9, 2007)