ZHUHAI PURIFIED TEREPHTHALIC ACID PLANT, CHINA

The project is a purified terephthalic acid (PTA) plant at Zhuhai, just north of Macao, in Guangdong Province in China. The new plant is owned by a company that was set up specially for the venture called Amoco Zhuhai.

INCREASED PTA PRODUCTION

It is intended that the production capacity of the PTA plant will be increased by 150,000t/yr. This will mean that the plant will have a total capacity of about 350,000t/yr when it goes into full production. The plant uses acetic acid as a feedstock, so it may decide to buy this from BP Amoco's new acetic acid plant in Chuanwei in Chongqing province. Alternatively, it may find another source.

The expansion to the existing plant was approved by the Chinese State Development Planning Commission in 1999, and completion of the facility is expected in early 2003. The project was delayed for a period because of its poor market prospects at that time. The decision to postpone came when Asian economy was in turmoil, as a result of the currency crisis that year. The estimated cost of the project is between $300 million and $400 million.

TECHNIP EPC CONTRACT

Technip, the Italian contractor, was awarded the engineering, procurement and contracting (EPC) contract for the project. The lump sum contract is believed to be worth $175 million, with much of the work to be done from Technip's Malaysian offices using Amoco process technology. The CTCI Group, based in Taiwan, is also in partnership with the Technip bid.

The State Development Bank of China has been involved in making a loan to help finance the new facility. The loan is worth $144 million. The new plant is intended to take advantage of the rapid growth in China's economy, which is leading to similarly rapid growth in the demand for purified terephthalic acid. PTA is a feedstock for polyester, which is also a massive export for China. Thus, much of the production may be used in products which eventually go to the USA, although the PTA itself will mostly be sold within China. Therefore the success of China's exports to the US market will be an important factor in the demand for the plant's product, despite the fact that it is expected that four fifths of the production will go to the domestic market. The new investment is also part of BP Amoco's ambitious expansion plans in the region. BP Amoco is reorganising all its operations, including petrochemicals, in order to extract maximum shareholder value from them.

AMOCO ZHUHAI

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