South Korea's SK Group, which owns the country's top oil refiner, has agreed to build a Won 1.2 trillion ($1.1 billion) petrochemicals complex in China jointly with China's state-owned Sinopec and BP, the company said Wednesday.
SK, which signed a preliminary deal with Sinopec and BP Wednesday, said the complex will have the capacity to produce 200,000 mt/year of butanediol, 600,000 mt/year of acetic acid and 250,000 mt/year of ammonia.
"The complex in the southwestern Chinese city of Chongqing breaks ground as early as July or August and is expected to reap more than Yuan 2 billion ($318 million) in pre-tax profits after completion in late 2014 or 2015," SK said.
The butanediol plant, which will cost Yuan 3.7 billion, will be built and run by a joint venture between SK and Sinopec. It will be the biggest plant in China producing butanediol to make spandex, synthetic leather and polyurathane, SK said.
The acetic acid plant will be constructed and run by a joint venture between BP and Sinopec, while the ammonia plant will be built and run solely by Sinopec, SK said, without providing shareholding details on the ventures.
The Chongqing butanediol plant will be SK's third petrochemical project with Sinopec. The two companies built a $26.5 million solvents plant, with a capacity of 60,000 mt/year, in Shanghai in 2004. Last December, SK and Sinopec signed a memorandum of understanding to build an 800,000 mt/year ethylene plant in Wuhan, central China's Hubei province.
"The Chongqing project is expected to accelerate SK's push for expanding projects in China," the company said.
The SK Group is a family-run business conglomerate which owns South Korea's biggest oil refiner SK Innovation which in turn has a petrochemical arm SK Global Chemical. The group controls dozens of affiliates in various industrial segments, including the country's biggest LPG distributor, SK Gas.
