BP to invest in US$400 mln in PTA plant in China

27-Jun-06

The British oil and petrochemical giant, BP, plans to take advantage of rising demand in China for purified terephthalic acid (PTA), as well as look for oil refinery investment opportunities. BP and its local partner, Zhuhai-based Fu Hua Group have invested US$400 million into phase two of its PTA project in the southern coastal city. BP holds an 85% stake in the joint venture, with a capacity of 900,000 tpa. The construction of the world's largest single train PTA unit gained official approval from the central authority in late April and has commenced construction. Upon completion at the end of 2007, the combined capacity could reach at least 1.4 million tpa and will satiate domestic demand. In China, 90% of PTA production is used in the textile industry. China's booming textile industry has prompted many petrochemical enterprises to begin producing PTA, a midstream petrochemical that can also be used for the production of bottles, packaging and film products. China's PTA consumption exceeded 10 million tons last year, of which only around 52% was supplied by domestic production. Despite competition, the industry is expected to grow as demand grows at double-digit rates.