Mar. 24 - China’s largest oil refiner Sinopec and Germany-based BASF officially submitted a planned US$900 million project extension at its joint venture in Nanjing for review by the Chinese authorities on March 19.
The project, enlarging the annual production volumes of ethylene pyrolysis at Yangtsi-BASF from 600,000 tons to 750,000 tons, represents BASF’s largest petrochemical project outside Germany according to a report issued by the Ministry of Commerce.
BASF plans to tap China’s rising demand for ethylene as the country looks to more than double production capacity of the chemical by 2010. Currently imports account of half of the country’s ethylene needs.
“The completion of the feasibility study marks an important step forward,” said Wang Tianpu, president of Sinopec.
March 26th, 2008 at 2:41 pm
I will have to jump in here as two different items are mixed into one.
BASF does not refine Oil. It is a (specialty) Chemicals company. BASF produces ethylene in this facility and does so by cracking natural gas. The ethylene is used for a myriad of chemicals such as PVC and PET to name a few. It consumes a lot of energy and that is why most of these facilities can be found in the Middle East where subsidized energy inputs or low transportation costs make it the best place. In germany new ethylene crackers are not welcomed due to regulatory constraints.
It does not add any energy infrastructure but requires additional (energy) infrastructure for its utilities.
March 26th, 2008 at 3:22 pm
The BASF cracker uses naphta as its feedstock from Jinling Petrochemical which owns a refinery near the plant . http://www.chemicals-technology.com/projects/basf/ for more info on the total project which started with a letter of intent in 1996 and commissioning of the first plant in 2005.
March 26th, 2008 at 4:40 pm
Dear Laurentius,
Thanks for your insightful comments. The original post was talking about two separate things which led to confusion. The fact that Sinopec, the JV partner and oil refiner in the project, had failed to be mentioned did not help either. I have seperated the two into seperate posts, and included some information that was missing in the original article.
The point that I found most interesting, and unfortunately failed to raise adequately, was how China is encouraging FDI in these restricted sectors energy and material manufacturing as it tries to increase domestic production of its voracious needs, the Sinopec Exxon deal being used a second example of that.
Thanks for pointing out the error and the bi-polarness of the report. Also, thanks for the additional information and links, very interesting reading.
Regards,
Andy
March 26th, 2008 at 9:43 pm
Thanks Andy for your response. “cracking and refining” is also confusing. By cracking you change the molecule structure and it enables the production of chemicals unknown in the natural world. Refining is taking a product and purify it or harvesting different pure products out of one mixed feedstock through destilation processes. Refining is comon in the oil industry, cracking (molecules) is what BASF does.