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.