BERLIN, Oct. 29 (Xinhua) -- BASF has signed a memorandum of understanding (MoU) with Chinese oil and gas producer SINOPEC to further strengthen an existing partnership of the two companies in upstream and downstream chemical production in China, the German chemicals giant announced on Monday.
Ludwigshafen-based BASF wrote on its website that it would build an additional steam cracker with SINOPEC and expand a 50:50 joint venture, known as the BASF-YPC Company, which they had already formed earlier. BASF-YPC will invest in a 50 percent stake to build the partnership's second steam cracker with a capacity of 1,000,000 metric tons of ethylene per year, while SINOPEC Yangzi Petrochemical (YPC) will invest the other 50 percent.
A joint pre-feasibility for the project study is scheduled to be concluded by the end of 2018. BASF-YPC and YPC will both have access to all of the products of the new steam cracker to develop their downstream product portfolios.
Amongst others, the basic chemicals provided by the new steam cracker enable BASF and SINOPEC to expand production capacity at BASF-YPC, their existing integrated joint venture "Verbund" site in Nanjing, the capital of China's Jiangsu province. At a Verbund site, plants are interconnected in order to utilize products, by-products and energy in the most efficient way, to save costs and minimize environmental impact.
"This additional investment into a new steam cracker and the expansion of our BASF-YPC joint venture in Nanjing underline the strong partnership between SINOPEC and BASF and the commitment to our customers in China," a statement by Martin Brudermueller, Chairman of the BASF Executive Board of Directors, read.
The two companies further revealed that they would jointly explore new business opportunities in China's fast-growing battery materials market. BASF highlighted that the rising importance of alternative energy in China, especially in the automotive industry, had led to a surge in demand for innovative battery materials for a range of applications.
BASF-YPC was founded in 2000, with a total investment to date of approximately 5.2 billion U.S. dollars. The integrated petrochemical site produces about 3 million tons of high-quality chemicals and polymers for the Chinese market annually.
The products of the joint-venture serve rapidly-growing demand in multiple industries including agriculture, construction, electronics, pharmaceutical, hygiene, automotive and chemical manufacturing. BASF-YPC posted sales of approximately 21 billion yuan (3 billion U.S. dollars) in 2017 and employed 1,882 people as of the end of that year.
BASF is the world's largest chemicals manufacturer by revenue, recording global sales worth 64.5 billion euros in 2017. As of last year, the publicly-listed company employed around 115,000 staff across the world.
