Oil giant Shell on Saturday signed a contract to build a four billion dollar petrochemical complex in southern China in the biggest ever joint venture between a foreign company and Chinese partners.
Shell will have a 50 percent stake in the venture, which is being launched jointly with China National Offshore Oil Corporation (CNOOC) and Guangdong province.
The complex is to be built at Daya Bay, close to Hong Kong. From 2005, it will produce 2.3 million tons of petrochemicals per year, the equivalent of two thirds of China's current imports, CNOOC chairman Wei Liucheng told a press conference.
The plant is expected to have a turnover of 1.7 billion dollars per year.
When a framework accord on the complex was signed in February 1998, the total investment had been valued at 4.5 billion dollars but Shell insisted the project had not been scaled down.
"The scope of the project has not changed," said Evert Henkes, the director general of Shell Chemicals.
"The sum has been reduced largely due to our working together with our partners in further detailed work on costs. We believe we can source more products, materials and services locally than we had originally thought."
Henkes added that China's upcoming entry to the World Trade Organization and a subsequent cut in tariffs on imports would not make the project any less worthwhile.
"The petrochemical industry in China does not rely to any significant extent on any trade protection, so when the project actually starts, and hopefully China will be a full member of WTO, it will not suffer all that much in terms of external competition."
Earlier this month Shell invested more than 400 million dollars in a stake in Sinopec, China's main oil refiner and petrochemicals producer, which made 20 percent of its stock available to international investors -- BEIJING (AFP)
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