13 May 1996 00:00 [Source: ACN]
SINOPEC has invited Amoco to take part in its 500 000 tonne/year ethylene cracker project in Fujian province. It had initially been discussing the project with Kumho, but approached the US major when the talks ran into difficulties. It now says it is talking with both potential partners.
The project is expected to come onstream during 2000-05 under China's Ninth Five-Year plan.
Amoco said it was invited by Sinopec to take part in the project in March this year. 'We were told the original proposal was made to Kumho, and that Kumho had terminated the discussions,' a senior Amoco spokesman told ACN.
Kumho denied it has terminated talks with Sinopec. 'We are still talking,' a senior Kumho planner said. 'Of course, there are problems involved in the negotiations, and there will always be problems. But we are still interested in the project.'
Amoco is 'very interested' in the project, the spokesman said. 'There is a wide range of possibilities for downstream investments in typical ethylene derivatives,' another Amoco spokesman said. However, he declined to name specifics.
If the joint venture is confirmed, it will be Amoco's first ethylene investment in China. The company presently operates two crackers in Texas, US, producing over 1m tonne/year of ethylene.
The US major joined Sinopec and the Fujian province in a feasibility study of the Fujian Oil Refinery last year. The study, which looks into the technical and commercial viability of the project, will be completed by the end of this year.
The refinery now has a refining capacity of 2.5m tonne/year. Fujian expects to lift this to 10.5m tonne/year in the next five years.
'If the project is viable, Amoco would certainly be keen on a majority share,' an Amoco official from the refinery division said.
Kumho is also looking into investing in aromatics after the cracker project is finalised, but declined to give details.
The South Korean group had already signed a letter of intent with Sinopec to build a 50:50 worldscale cracker in Fujian, which is expected to start operations in 2001.
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