LyondellBasell / Sinopec: JV to manufacture propylene oxide and styrene monomer in China

On 25 January 2021, LyondellBasell, one of the largest plastics, chemicals and refining companies in the world and the China Petroleum & Chemical Corporation (Sinopec), one of the largest integrated energy companies in China, announced the signing of an agreement to form a 50:50 joint venture (JV) which will produce propylene oxide (PO) and styrene monomer (SM) in China’s domestic market. First announced on 23 December 2019, the JV will operate under the name Ningbo ZRCC LyondellBasell New Material Company Limited.

LyondellBasell’s Torkel Rhenman, Executive Vice President, Global Intermediates and Derivatives, signs an agreement with Sinopec to form a 50:50 joint venture (JV) (Source: LyondellBasell)

The JV will construct a new PO and SM unit in Zhenhai Ningbo, China. This new unit will have 275,000 t/y capacity of PO and 600,000 t/y capacity of SM. The unit will use LyondellBasell’s PO/SM technology. Products manufactured by the JV will be marketed equally by both partners, significantly expanding their respective participation in the Chinese market for PO and SM. Startup is expected at the end of 2021. The formation of the JV is subject to approvals by relevant government authorities, including antitrust review by the State Administration for Market Regulation (SAMR). LyondellBasell said it expects to make its equity contribution to the JV during Q1 2021.

„As China’s economy continues to grow, so will demand for propylene oxide and styrene monomer. We are excited to expand our relationship with Sinopec through this joint venture in order to better serve China’s domestic market. Sinopec’s outstanding operational capabilities combined with LyondellBasell’s leading technology is a win-win,“ said Torkel Rhenman, Executive Vice President, Intermediates and Derivatives, and Refining.

„Built on the remarkable success of our first Joint Venture, we are very delighted to continue to enhance the important partnership with LyondellBasell for future achievements. The establishment of the new Joint Venture is not only in line with the national drive for further opening-up, but also a vital step for Sinopec to deepen and expand our international operations,“ said Yu Baocai, Senior Vice President of Sinopec Corp. „We have great expectations on the new Joint Venture for propelling the economic development of the city of Ningbo to a new level. During the 14th Five-Year Plan period (2021 – 2025), Sinopec will continue to promote green industrial upgrading and innovative transformation, contributing to the everlasting economic growth of Zhejiang Province and Eastern China, and even the development of the chemical industry in China.“

According to IHS Markit, China accounts for more than 60 % of chemical market demand in Asia and represents 40 % of global chemical market growth over the next decade. LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu.