SABIC and Sinopec Corp. sign agreement to form 50:50 joint venture

01-Feb-08

China Petroleum and Chemical Corporation (Sinopec Corp.) and Saudi Basic Industries Corporation (SABIC) have signed a Heads of Agreement (HOA) towards forming a joint venture company. The total investment outlay will approximate at US$1.7 bln. This 50:50 joint venture will invest in a 1 mln tpa ethylene derivatives complex (600,000 metric tons of polyethylene and 400,000 metric tons of Ethylene Glycol) to be set up in Tianjin. Ethylene feedstock for the project will be supplied from an ethylene cracker owned by Tianjin Petrochemical Company, a branch of Sinopec Corp. Start up of the complex is scheduled for September 2009. China is an important market for SABIC's global strategy. This Heads of Agreement is a key milestone towards realizing SABIC's goal of establishing a manufacturing centre in Asia. This facility in Tianjin will serve customers in the world's fastest growing market, and is an important component in SABIC's corporate strategy of being among the world's top petrochemical companies by 2020.