LYB and Bora Sign Definitive Agreement for China Project
Following up a Memorandum of Understanding signed in September 2019, LyondellBasell has now signed a definitive agreement with Liaoning Bora Enterprise Group (Bora) to establish a Chinese olefins and polyolefins hub that is expected to cost $2.6 billion.
LyondellBasell said it expects to make its equity contribution in the coming months. The formation of the jv is subject to approvals by relevant government authorities, including antitrust review by the State Administration for Market Regulation.
Plans call for the Panjin China-based joint company Bora LyondellBasell Petrochemical Co. Ltd to operate a 1.1 million t/y cracker and downstream production facilities for 800,000 t/y of PE, 600,000 t/y of PP and 350,000 t/y of styrene monomer.
According to Reuters, citing company sources, the Liaoning provincial government approved the project in 2017, and Bora has secured a 10-year, 10.8 billion yuan ($1.5 billion) syndicated loan from Chinese banks.
The Bora sources added that 1.64 million t of feedstock, including naphtha, will be drawn from the Bora refinery, with an additional 1.1 million t of propane or butane to be drawn from the open market.
All of the facilities are expected to be up and running in the second half of this year employing processes owned by LYB, which is the world’s biggest licensor of polyolefins technology. The PE plant will use the group’s Hostalen ACP process and the PP plant its Spheripol and Spherizone technologies. LYB did not disclose the marketing arrangement for SM.
The Rotterdam-headquartered, Houston, Texas-managed petrochemicals giant will market the output to high-demand industries in China, including packaging, transportation, building and construction, and healthcare and hygiene.
LyondellBasell already has three compounding facilities for PP in the People’s Republic. Altogether, the three sites at Guangzhou, Suzhou and Dalian have capacity to compound 130,000 t/y of the commodity plastics.
The People’s Republic is believed to account for more than 60% of the Asian polyolefins market and at last count represented 40% of global growth