BASF-YPC Co., Ltd., has become a major user of natural gas supplied through China's cross-country natural gas transportation project, according to an agreement it signed with PetroChina Co., Ltd., a leading oil and gas company listed in Shanghai, Hong Kong and New York.

BASF-YPC is a 50-50 joint venture between BASF and China Petroleum and Chemical Corporation (Sinopec), established in 2000 with a total investment of more than 300 million US dollars. The company will build and operate a steam cracker (600,000 tons ethylene per year) and nine downstream plants on its 220-hectare site by the Yangtze River.

The plants will be completed by the end of 2004 and are expected to begin commercial operation in mid-2005. BASF-YPC will produce about 1.7 million tons of high quality chemicals and polymers per year for the rapidly growing Chinese market.

According to sources with BASF-YPC, a 6-kilometer-long direct branch pipeline -- 406 mm in diameter -- has been built exclusively for gas supply to BASF-YPC. BASF-YPC will consume 600 million cubic meters of natural gas annually.

The company's use of natural gas will help protect the local environment as it will not produce furnace coal ash, slag or sulfur dioxide. By using natural gas, the plant also requires less land.

BASF, which is headquartered in Germany, is the largest foreign investor in China's chemical industry. It has so far set up 10 solely-owned companies and nine joint ventures in the country, with a total investment of about 600 million US dollars and more than 3,800 local employees.

(Xinhua News Agency October 23, 2004)