China's energy giants Sinopec Corp and PetroChina are set to build at least 6 mega-sized petrochemical crackers at an investment of US$20 bln by the end of the decade. However, it seems that the fundamental of building large-scale joint petrochem ventures (rampant during the previous decade) is over, as China returns to a path of self-sufficiency. Those partners that bring in not only cash or technology, but also upstream assets (such as access to oilfields) and advanced technology will be favoured.
This implies securing of foreign oil and gas production assets for the domestic refining business, to plug a widening domestic supply gap in the world's second-largest oil consumer. The new policy indirectly ensures participation by only key suppliers.
But experts caution that a self-reliance policy could risk driving investors away to the Middle East, where domestic and global majors are adding cracker capacity to take advantage of cheap and abundant feedstocks, or to Asia's oil trading hub Singapore.
Sabic has US$25bn worth of current expansion projects, while Dow and India's Reliance Industries Ltd. are thought to be in talks over an alliance that could involve major petrochemical project in India.
24-Jul-06 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}