Shanghai Chemical Industry Park, envisioned to become Asia's largest chemical industrial park, said it is planning for a new ethylene plant, expected to also cost about US$2.7 billion, with an annual capacity of 1 million tons of ethylene, the main material used in synthetic rubber and plastics. The plant makes ethylene out from crude oil.

"In 2010, Shanghai is expected to become the largest center for ethylene production in China with an annual capacity of nearly 3 million tons, contributing nearly half of the country's total output," said Li Guohua, technology director with Shanghai Chemical Industry Park Development Co Ltd.

Li was referring to the combined capacity from the proposed ethylene plant, BP's joint venture and a newly upgraded cracker owned by the Shanghai Petrochemical Co which is near the park located in the city's southwest suburb.

In BP's ethylene joint venture, the UK oil giant takes a half stake, while Sinopec holds a 30 percent and Shanghai Petrochemical holds the balance.

The project, regarded as BP's single largest investment in China to date, is planned to start operation in 2005 with a 900,000-ton ethylene cracker and a 600,000-ton polyethylene facility.

Officials with the park said the "most important task of this year" is to invite foreign investments for the proposed project, with Sinopec acting as the Chinese partner.

Li said the proposed ethylene plant could also involve an investment of around US$2.7 billion.

BP's officials were not available for comment.

China's annual consumption of ethylene is about 8.6 million tons at present, half of which is imported.

(Eastday.com May 20, 2003)