Sinopec scaling back petrochemical build-up amid growing competition from US shale gas

29-Apr-14

China's top refiner Sinopec Corp is scaling back billions of dollars in petrochemical investments in the face of growing U.S. competition in the sector and rising domestic opposition to oil and gas plants over environmental concerns, as per Reuters. The slowdown marks a break from two decades of expansion led by China's state energy majors, which have placed self-sufficiency above profitability and environmental impact to chase robust demand growth in the world's second-largest economy. The scaleback follows an earlier reduction in its 2014 spending budget in response to the nation's slowing economy and the poor performance of its chemical division. Sinopec has shelved or postponed proposals for nearly 4 mln tons of annual capacity of ethylene, potentially boosting China's petrochemical imports from companies such as Saudi's SABIC and U.S. firm Dow Chemical Co. Local governments, traditionally strong lobbyists for refineries or ethylene plants, are no longer as enthusiastic for such mega projects after Beijing last year started to link their political careers with ensuring environmental protection rather than just economic growth.