BEIJING (Reuters) - Houston-based chemical and plastics firm LyondellBasell Industries (LYB.N) said on Friday it had signed “definitive agreements” with a Chinese refiner on a $2.6 billion joint venture to produce petrochemicals in northeast China’s Liaoning province.
LyondellBasell will take a 50% stake alongside Liaoning Bora Enterprise Group, one of a number of independent Chinese oil refiners known as “teapots”. The joint venture will operate a 1.1 million tonnes per year ethylene cracker and polyolefin derivatives complex in the coastal city of Panjin.
The estimated $2.6 billion cost marks the biggest investment yet in petrochemicals by a Chinese “teapot” looking to diversify away from the saturated local fuel market.
“The complex will produce products that serve the growing demands of various industries in China, including packaging, transportation, building and construction, and healthcare and hygiene,” LyondellBasell said in a statement.
The project is expected to start up in the second half of 2020, it added.
The two companies had signed a memorandum of understanding to form the joint venture six months ago, when they touted total investment of up to $12 billion over 10 years.
Reporting by Tom Daly; Editing by Susan Fenton