The deal, likely to be finalised in days, will mark a breakthrough for international companies seeking a foothold in China"s fast expanding petrochemical market as it comes at a time when Beijing appeared to be shifting to self-reliance in building the booming sector.
Under the pact Sabic would join its Chinese partner, state-run Sinopec Corporation in building a one million tonne a year naphtha cracker to produce ethylene, a key building block for petrochemicals, in the northern city of
Sabic would also own a 50 per cent stake in two production lines of polyethylene - raw material for plastics - and one mono ethylene glycol facility, an intermediate for chemical fibre, with total investment worth some $500 million, the source said.
"If the final talks on marketing go through, the deal should be finalised within days," the source close to the deal said.
Sinopec, Asia"s top refiner and
Sabic has been on an expansion spree in Asia and is looking closely at
It has been working for years to break into
Apart from hooking up with powerful state giants, Sabic has been in talks for three years with private Chinese firm Shide to build a $5.2bn complex - a 200,000 bpd refinery, a 1m tpy ethylene plant and a 300,000 tonne oil terminal - in northeast
Chinese giants Sinopec and PetroChina are set to add at least half a dozen mega-sized petrochemical crackers costing some $20bn by the end of the decade, extending a building frenzy started 10 years ago.
Global players BP, Shell, ExxonMobil and BASF were picked then for their technology, financing and savvy management.
PIN/Gulf-Daily-News.Com
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