CHINA TARGETS DOUBLING OF ETHYLENE CAPACITY BY 2000
China is proceeding with an ambitious program to double ethylene capacity by 2000.
That effort spearheads an overall expansion in China's petrochemical sector to meet rapidly surging domestic demand.
One of the keys to the success of these programs is how welcome foreign participation will be in China's petrochemical sector.
CHINA OUTLOOK
Ethylene capacity in China climbed to 2.1 million tons/year in 1990 from slightly more than 1 million tons/year in 1986, Bowei Lee of Lee Chang Yung Chemical Industry Corp., Taiwan, told DeWitt & Co. Inc.'s petrochemical review last month in Houston.
If economic needs supersede political concerns, that pace of petrochemical expansion is expected to be maintained in the 1990s, and plants proposed by state owned entities could double China's ethylene capacity by 2000, Lee said.
Foreign investment in refineries and petrochemical plants is expected to be allowed only grudgingly. Projects already being seriously discussed with foreign companies propose building another 1.35 million tons/year of ethylene capacity, Lee said.
While China's ethylene capacity grew 17%/year during 198488, other annual capacity gains were propylene 19%, polypropylene 22%, HDPE 46%, ethylene glycol 19%, and styrene monomer 20%, Lee said. Now in the first year of China's eighth 5 year economic plan, that pace of expansion is expected to continue.
Lee said China's petrochemical growth has been achieved despite lack of capital, an inadequate distribution system, and laws restricting access to feedstocks and domestic markets. In the future, Chinese leaders will decide not only whether to seek foreign investors but how far to ease restrictions to attract foreign capital.
FOREIGN PARTNERS
Factors supporting China's continuing petrochemical growth include ample raw materials, strong agricultural and industrial demand, and vast potential for a consumer market.
Even with increased petrochemical capacities and largely untapped consumer markets, China still is a major importer of plastics and fertilizers, Lee said.
Although the eighth 5 year plan isn't fully developed, four projects announced so far will add capacities of 600,000 tons/year of ethylene, 360,000 tons/year of low density polyethylene (LDPE), 140,000 tons/year of swing LDPE/linear low density polyethylene, 300,000 tons/year of styrene monomer, 240,000 tons/year of polystyrene, 200,000 tons/year of ethylene glycol, and 140,000 tons/year of polypropylene.
In addition, 18 local or provincial petrochemical production companies have proposed ethylene projects. Also, four foreign companies are proposing to build four complexes expected to include ethylene capacity in China.
Although not expected, if all of those 18 local plants are built, ethylene capacity will increase by 3.4 million tons/year. One project, a 130,000 ton/year expansion in Panjin, Liaoning province, is complete.
Not all remaining projects will become part of the eighth 5 year plan. But if only half are built during the decade, China's ethylene capacity will double by 2000.
Projects proposed by foreign companies include:
- Formosa Plastics Co.'s $7.2 billion, 450,000 ton/year ethylene plant in Fujian province.
- Royal Dutch/Shell Group's $5.2 billion, 100,000 b/d refinery and 450,000 ton/year ethylene plant in Guangzhou province.
- Thailand C.P. Group's $4 billion, 75,000 b/d refinery and 450,000 ton/year ethylene plant in Zhejiang province.
- Mobil Corp.'s $300 million refinery on Hainan Island.
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