BASF and Sinopec plan 25% ethylene capacity expansion at Nanjing

28-Sep-05

China relies on imports to meet 50% of its petrochemical demand, which is growing at double-digit rates. BASF-YPC Co.'s steam cracker and 9 downstream plants, started in June this year, have the capacity to produce 1.7 million metric tons of chemicals. Even with the start up of this new chemical project in Nanjing, capacity is not sufficient to meet the growing demand. Production in China in 2004 was 6.7 million metric tons of ethylene, and demand was 16 million tons. To meet this robust demand, BASF AG, the world's biggest chemical company, and its Chinese counterpart- China Petroleum & Chemical Corp. (Sinopec) plan to expand ethylene capacity at Nanjing by 25%. The exact extent and timing of the additional investment are under consideration. BASF and Beijing-based Sinopec started operating a US$2.9 billion chemical plant and other processing units in Nanjing in June this year. BASF and BP Plc, Europe's biggest oil company, are expanding chemical production in China to tap demand. BASF aims to double its global sales from China to 10% by 2010. By 2009, BASF plans to invest most of its 1 billion euros ($1.2 billion) earmarked for Asia, in China. By 2015, 50% of BASF's Asian business will come from China, Hong Kong and Taiwan.