The Germany-based chemical company, BASF, has confirmed it has signed a memorandum of understanding (MoU) with Sinopec to develop a steam cracker in China, Reuters reports.
The joint venture with Sinopec will see BASF invest in a 50% stake in the new cracker with Sinopec Yangtzi Petrochemical taking the other 50%.
According to Reuters, it is believed the new steam cracker will have a yearly capacity of one million tonnes of ethylene, a building block for plastics, rubber and synthetic fibre.
BASF Chief Executive, Martin Brudermueller, said: “This additional investment into a new steam cracker and the expansion of our BASF-YPC joint venture in Nanjing underline the strong partnership between Sinopec and BASF and the commitment to our customers in China.”
The deal will become the second major investment by the chemical giants in the last four months following the news in July that BASF obtained a preliminary deal to develop China’s first wholly foreign-owned chemicals complex in Guangdong, thought to be worth $10bn in investment.
In a joint statement, the companies said: “The rising importance of alternative energy in China, especially in the automotive industry, has led to a surge in demand for innovative battery materials for a range of applications.”