On January 31, China Petroleum & Chemical Corporation (Sinopec) signed a contract with the Saudi Basic Industries Corporation (SABIC), the biggest chemical production company in Saudi Arabia, to jointly establish an ethylene derivative production company with an annual production capacity of 1 million tons in North China's Tianjin. A source with Sinopec confirmed the news but did not comment.

According to the contract, Sinopec will invest US$1.7 billion in the project. The joint venture company, whose production line will be completed by September of 2009, will have an output of 600 thousand tons of polyethylene and 400 thousand tons of ethylene glycol annually.

An analyst with Shenyin & Wanguo Securities Co. Ltd said that Sinopec has made the move to meet domestic demands given that the market is now short of polyethylene supplies and partly depends on imports. In fact, the Sinopec has been integrating ethylene-related projects in its subordinate companies.

For more details, please read the full story in Chinese. (http://finance.sina.com.cn/chanjing/b/20080201/02504480547.shtml)

(China.org.cn February 1, 2008)