China's Zhejiang Satellite wins approval for $4 bln petchem plant to use U.S. ethane
By Chen Aizhu
SINGAPORE, Aug 29 (Reuters) - China's Zhejiang Satellite Petrochemical Co Ltd 002648.SZ has won regulatory approval to start building a 30 billion yuan ($4.2 billion) petrochemical complex in east China to process ethane from the United States, a company official said on Thursday.
This will be the second Chinese petrochemical facility to cash in on the abundant and cheap U.S. ethane unlocked by the shale revolution in North America, analysts said.
Last week, Singapore's SP Chemicals started up a 650,000 tonnes per year (tpy) ethylene plant in Taixing in Jiangsu province that partly processes U.S. ethane supplied under a long-term agreement, according to a local media report and analysts who follow the project.
Zhejiang Satellite will start construction in September on a 1.25 million tonnes per year (tpy) ethylene plant in Lianyungang in Jiangsu province, which will use U.S. ethane, a byproduct from shale gas, as feedstock, Ding Liping, an investor relations officer, told Reuters by phone.
"This is the company's phase-one investment for a total of 2.5 million tonnes per year ethylene production facilities that will process fully U.S. ethane," said Ding, adding that the mechanical construction for phase-one facilities is slated for completion by August next year.
The company, headquartered in Jiaxing in east China's Zhejiang province, will start about a year later on an expansion programme to double the facility at Lianyungang to 2.5 million tpy, said Ding.
Zhejiang Satellite is China's largest producer of acrylic acid, a chemical used in making paints and wrapping tapes, where demand has grown sharply to a booming E-commerce market.
The plant is expected to receive its first ethane from U.S. firm Energy Transfer Partners, L.P. in the fourth quarter of 2020 under a supply agreement of more than 10 years, with annual supplies of about 3 million tonnes, said Ding.
($1 = 7.0928 Chinese yuan renminbi)
(Reporting by Chen Aizhu; editing by Shri Navaratnam and Richard Pullin)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Latest Markets Videos
- Fed could cut rates in 2023, 2024 once inflation under control -Bullard
- US STOCKS-Wall St plunges as Snap's bleak forecast sparks selloff
- All Fed officials backed May rate hike, 'most' saw half-point rises in June and July, minutes show
- Former Fox News employee's suit accuses former anchorman of rape