Dow, Sinopec in $3b deal

Dow, Sinopec in $3b deal

BEIJING (AFP): U.S-based Dow Chemical Co. has signed a letter
of intent with China Petrochemical Co. (Sinopec) to set up a
three billion dollar joint venture in the northeastern city of
Tianjin, the China Daily reported yesterday.

The integrated petrochemical complex, with a projected annual
capacity of 600,000 tons of ethylene, would also make related
products such as polyethylene and resin.

But Dow president William Stavropoulos was quoted as saying
that Monday's signing was "just an easy start. We all know the
follow up will be a hard, tedious negotiation."

The proposed 50-50 venture is subject to feasibility studies
and government approvals. It will not begin production until
after 2000, the report said.

The signing marks the third major petrochemical venture
announced by Sinopec and a foreign partner since last year.
Germany's BASF signed a letter of intent in early 1996 for a six
billion dollar plant in eastern China's Nanjing.

And last October, British Petroleum Development Co. inked
plans for a $2.5 billion ethylene facility in Shanghai.