51% privately owned Zhejiang Petrochemical, plans mega-refinery off east coast of China

02-May-16

China's first private-led petrochemical project- Zhejiang Petrochemical, is 51% owned by textile giant Rongsheng Holding Group. The Chinese group is planning to build a US$15 bln mega-petrochemical complex on an island near Shanghai, in what would be the country's first and largest energy installation to be built by a non-state investor. The project is one of the first concrete signs of Beijing's stated desire to experiment with "mixed ownership" - or partial privatisation - in its massive state-controlled energy sector to boost efficiency and drive greener growth, as per Reuters. Zhejiang Petrochemical awarded a key design contract for the project, which could compete head-to-head with state-owned firms such as Sinopec that dominate the market. Rongsheng has partnered with local firms, including a state-owned chemical producer, to build the complex, which would include a 400,000 bpd refinery and a 1.4 mln tpa ethylene plant. Designing contract has been awarded to three firms, including China Huanqiu Contracting and Engineering Corp and Sinopec's Luoyang Petrochemical Engineering Corp, for the project, to be built on the 6.25 sq km (2.4 sq mile) Dayushan Island, off eastern China, near the ports of Shanghai and Ningbo. The project, which needs Beijing's approvals including environmental clearances, is likely to start up around 2020, according to two sources with knowledge of the plan, in Reuters.