APIC '07: BP to move global acetyls HQ to China

17 May 2007 13:02  [Source: ICIS news]

By Florence Tan

 

TAIPEI (ICIS news)--BP is to move its global acetyls headquarters from London to China which has seen phenomenal growth in recent years, a key executive said on Thursday.

 

About seven to eight of its key staff will move to Shanghai, including the global business leader Guy Moeyens, while the rest will be redeployed within BP, Gordon Wilson, general manager of BP Acetyls China, told ICIS news on the sidelines of the 28th Asia Petrochemical Industry Conference (APIC).

 

The decision to move was made early this year he said, adding that the team will oversee global operations.

 

The Shanghai office will also focus on operations such as the 400,000 tonne/year acetic acid joint venture Yangtze River Acetyls (Yaraco) within China as well as working on its latest project in Nanjing, Jiangsu province.

 

Other responsibilities for the team include overseeing BP's substantial acetyls import business in China and exploring opportunities for future development, Wilson said.

 

Construction work on the 500,000 tonne/year project under joint venture BP-YPC Acetyls (BYACO) will kick off within the next two months after the project's start-up date was pushed back to the first half of 2009 from this year.

 

Negotiations took longer than usual as "we wanted to have an extremely competitive asset", Wilson said.

 

The companies managed to iron out carbon monoxide (CO) feedstock supply, a major concern among acetic acid producers, he added.

 

Partner Yangzi Petrochemical will build a CO reformer using natural gas feedstock to supply the gas, he said.

 

The acetic acid project was supposed to be based on natural gas from the west-east pipeline, but the companies had to drop the idea as the country's gas demand has far exceeded supply.

 

"We were part of a bigger issue. Using natural gas in east China is not the preferred option [although] in South China and Sichuan there will be options and opportunities," Wilson said.

 

BP Acetyls has its fair share of natural gas shortage problem in Chongqing.

 

"We periodically suffer from natural gas shortage as demand vastly exceeds supply," Wilson said, adding that interruptions usually take place during winter and frequent maintenance at gas plants.

 

While Chongqing was near the feedstock source, the Nanjing project will be in the heart of China's demand.

 

The largest acetic acid market in China is in the east where many purified terephthalic acid (PTA) plants are located, Wilson said. The area consumes around 1.1m tonnes/year or 50% of the country's demand, he added.

 

In the last four to five years, acetic acid demand has been growing at 15-16% annually and China continued to charge ahead with double-digit growth, he said.

 

"If it continues to grow at such a large rate, it will need a new world-scale acetic acid plant every two years," Wilson said, but added that ethanol-based plants which accounts for around 15% of the country's capacity could upset the supply-demand balance.

 

BP Acetyls is also actively looking at future investments, preferring to be located within the markets.

 

"In my personal opinion, the 'in country' guy usually wins, Wilson said, in reaction to competition from the Middle East.

 

"In the acetyls business, it boils down to [the] relationship with customers."

By: Florence Tan
+65 6780 4359

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