May 1, 2005

BP, Sinopec ink deal to build acetic acid plant

BP and Sinopec Corp. signed a deal to build a 500,000 metric ton per year acetic acid plant in Nanjing, Jiangsu, a province in China.

Acetic acid often sees use as an intermediate in a wide range of products including fibers, paints, adhesives, pharmaceuticals, and printing inks. The plant will use methanol and carbon monoxide as a feedstock.

"The global petrochemical sector is on the up cycle, and Chinese market demand is growing rapidly," said Wang Jiming, president of Sinopec. "The co-operation of the project in Nanjing will obviously enhance both parties' existing strategic partnership, which will contribute to the rapid growth of the Chinese economy."

In May 2004, BP and Sinopec signed a heads of agreement in London for the joint venture in Nanjing, during the Chinese Premier Wen Jiao Bao's visit.

Located in the heart of the Yangtzi Delta, the plant will be a 50/50 split between the two companies. The Nanjing plant will become part of BP's acetyls and aromatics petrochemicals business.

BP and Sinopec already operate the Yaraco acetic acid joint venture in Chongqing, China. This plant's capacity is expanding from 200,000 to 350,000 metric tons per year.