The US$2.7 billion joint venture, Shanghai SECCO Petrochemical Co Ltd, aims to develop a complex that will produce 900,000 tons of ethylene annually.

BP Chemicals controls 50 percent of the Shanghai-based joint venture, while Sinopec holds a 30 percent stake. Sinopec subsidiary Shanghai Petrochemical Company holds the remaining 20 percent.

The joint venture will also produce a combined total of 1 million tons of polyethylene, polypropylene and polystyrene a year.

At yesterday's founding ceremony, Byron Grote, managing director of BP Chemicals, said: "The Shanghai SECCO project is not only BP's largest investment in China, but also one of the largest of any foreign companies in China.

"It is a significant step for our business strategy in the growing Chinese market."

Sinopec President Wang Jiming said the co-operation with BP would facilitate the sale of the venture's products in the international market.

Wang added the project is of great significance in that it will sharpen the competitiveness of China's petrochemical industry, especially after entry into the World Trade Organization.

The project also brings closer the realization of China's ambition to build Shanghai, a promising international financial hub, into one of the leading petrochemical production bases in the world.

The city is expected to spend 150 billion yuan (US$18 billion) to construct a petrochemical park where Shanghai SECCO will be located.

In addition to the joint venture with BP, Sinopec is currently at work on another large petrochemical project with another foreign shareholder, Exxon Mobil.

Earlier last month, Sinopec signed an agreement with Exxon Mobil and Saudi Aramco to submit a feasibility study on building a 600,000-ton-a-year ethylene production facility in a Sinopec refinery in East China's Fujian Province.

Sinopec is to hold half the stake while the other two are to equally split the rest.

China produces more than 4 million tons of ethylene annually, but this satisfies only two-thirds of the domestic demand.

The country is expected to double its ethylene capacity to about 8 million tons within the next five to six years through the launch of several complexes with foreign majors, to meet the increasing demand.

(China Daily December 11, 2001)