China environment checks impact on projects limited

07 April 2006 11:07  [Source: ICIS news]

River pollutionSINGAPORE (ICIS news)--A government crackdown on environmental hazards at 20 Chinese petrochemical projects could raise the cost for some, but is unlikely to result in delays, sources from companies involved said on Friday.

China’s State Environment Protection Administration (SEPA) on Wednesday said it had completed checks on 20 projects at places which could pose environment hazards and ordered companies to carry out changes.

Companies said while it could raise costs up to a couple of percentage points for some, there wouldn’t be any delays to projects or effect on production for those plants that had already started up.

The cost for Dalian Dahua Group’s Rmb3-4bn ($373.1-497.5m/Euro314.8-419.7m) aromatics project could rise by 1-2% from the installation of additional environment protection facilities, but it will not affect the project otherwise, a company source said.

Yunnan Three Circles Chemical, which is building a 1.2m tonne/year diammonium phosphate (DAP) plant, will have to shell out more money to resettle residents in two villages, a company source said. But this will not affect the project’s start-up in early 2007, he added.

Most of the companies, including Dahua Group, Sichuan Tianhua Co, Samnam Petrochemical and BP Zhuhai, have submitted supplementary environment reports after being told to do so around two months ago, company sources said.

A Samnam source said SEPA is to evaluate the reports for its 500,000 tonne/year purified terephthalic acid (PTA) project at Qingdao, Shandong Province, on Friday while the Dahua Group source said its review will be done next Monday.

PetroChina has submitted reports to improve the design for the waste treatment system, recycling of waste water and environment risk assessment for its 800,000 tonne/year cracker project at Chengdu, Sichuan Province, a local government official said.

SEPA also ordered the local government to submit an environment impact assessment report on the petrochemical zone, which will be submitted in June, he added.

Yangzi Petrochemical has started up its aromatics expansion project but a company spokesman said it will comply with SEPA’s requirement and submit the required reports.

He added that this will not affect the production at the plant.

A Sichuan Tianhua Co source said they have submitted the reports. He added that the environment checks has not affected production at the 25,000 tonne/year 1,4-butanediol (BDO) unit at Luzhou, Sichuan Province.

The unit was started up in February, but it will be shut for a one-month turnaround on Friday as the company’s utilities plant is scheduled for maintenance.

In February, the SEPA ordered checks on 127 petrochemical projects, representing investments worth Rmb450bn, which are located at sensitive areas such as major rivers and bays. Beijing officials conducted checks on 20 projects while local environment officials were responsible for the remainder.

“The results showed that petrochemical plants located at major water sources in China pose a large level of risk and yet the required risk control measures are not in place,” said Pan Yue, vice director of State Environment Protection Administration (SEPA).

The 20 projects represent an investment of Rmb60.6bn which will increase by another Rmb1.6bn after the check. Results of the 107 projects will be announced on 20 May.

SEPA tightened control on petrochemical projects after the Songhua River incident where more than 100 tonne of toxic chemicals leaked into the river following an explosion at the Jilin Petrochemical aniline plant in November.

By: Florence Tan
+65 6780 4359

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