Xiamen may relocate Dragon’s PX project

20 December 2007 08:07  [Source: ICIS news]

By Florence Tan

SINGAPORE (ICIS news)--China is considering relocating a controversial paraxylene (PX) project in Xiamen, Fujian province, to Gulei peninsula in neighbouring Zhangzhou city on environment and safety concerns, a city government spokesman said on Thursday.

However, the Xiamen official declined to say if the government will compensate the company for the relocation of the yuan (CNY) 10.8bn ($1.5bn) project.

Xianglu Chemical Fibre, parent of the project operator Dragon Group, said it has not received any notice from the government regarding the move and compensation.

Environmental concerns arose as Xiamen allowed the construction of residential properties in Haicang district which was meant for industrial use. Residents took to the streets to protest against the project in April.

The government backed down and agreed to review the proposal. It recently completed an environment study on the project and sought the public’s view, but many still opposed it.

“Although this is a large project – and a good one too – the fact that so many people are against it requires us to carefully consider the matter from a scientific, democratic and public viewpoint,” Fujian provincial party chief Lu Zhangong was quoted as saying in local media reports.

The Dragon Group received approval for the project in 2006 after a four-year wait, a company official said.

It has completed piling at the Xiamen site, he said, adding that project contracts were already signed and equipment orders were placed.

The company might have to wait another two years if it needed to seek the central government’s approval for the relocation, the official said.

The Gulei peninsula is about 100km away from Zhangzhou city which is adjacent to Quanzhou, where Sinopec and ExxonMobil are building a petrochemical complex including a 700,000 tonne/year PX plant.

The island, which has a deepsea port, has been slated for heavy industrial use but it was unclear if its infrastructure was in place, the official said, adding that Xianglu has also not decided if its downstream purified terephthalic acid (PTA) project would be moved.

Dragon’s logistics costs could rise after the relocation as it would need to ship PX back to Xiamen, he said.

($1=CNY7.38)

By: Florence Tan
+65 6780 4359

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