SABIC plans $1B oil plant in China
(Reuters)
Updated: 2006-05-21 09:15 SHARM EL-SHEIKH, Egypt - Saudi Basic Industries
(SABIC) confirmed on Saturday it was in talks with China's Sinopec on a
petrochemical plant deal worth more than $1 billion.
Chinese officials
said earlier this year that SABIC, one of the world's 10 largest petrochemical
firms, would resume negotiations with Sinopec Corp. to build a major ethylene
complex in China.
SABIC, which has not previously commented on the project, has been looking at
investing in China's fast-expanding petrochemical sector for years but has yet
to land a concrete deal.
Asked how much the deal would be worth, SABIC chief executive Mohamed al-Mady
told reporters: "Any deal (in China) these days is worth more than $1 billion."
"We are talking with China Petrochemical though a deal
hasn't materialised yet," he said. "It could be in the region of $1
billion.''
Al-Mady said negotiations were under way, but declined to give a timeframe.
"Deals in China are not concluded in days," he said.
SABIC is already working on a $5 billion
petrochemicals project in Dalian, northeast China, with local building materials
maker Dalian Shide Group. The two companies plan to build plants with capacity
to produce 1.3 million metric tons a year of ethylene and chemicals, al-Mady
said in 2004.
Last year Beijing gave Sinopec, China's top refiner and petrochemicals
producer, approval to build a $3.1 billion project that included the ethylene
plant and a 250,000 barrel-per-day (bpd) refinery in the northern city of
Tianjin by 2008.
SABIC expressed interest in the Tianjin project more than a year ago, but
neither party pursued it in earnest before the investment won government
approval.
China announced that talks would resume after Saudi King Abdullah's visit to
Beijing this year.
In 2004, SABIC also discussed building a similar-sized petrochemical plant in
the northeast Chinese city of Dalian with a private Chinese company.
Al-Mady said the Dalian project was still in the pipeline, and SABIC was
looking to turn its office in China into a company.
SABIC, the largest listed company in the Gulf Arab
region, is 70 percent-owned by the government of Saudi Arabia and 30 percent by
private investors in Saudi Arabia and other countries of the Gulf Cooperation
Council.
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