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Sinochem Unit gets USD1.65 Billion Investment from State Firms

January 14/2020

MOSCOW (MRC) -- Sinochem Energy, a unit of Chinas Sinochem Group, has agreed to sell a 20% stake to five state-owned firms for 11.56 billion yuan (USD1.65 billion), reported Kemicalinfo with reference to Xinhua news agency.

The financial investment arms of Agricultural Bank of China and Industrial Bank of China (ICBC), and Citic Securities Investment Co were the strategic investors, the official news agency said late on Friday.
Except for its struggling upstream business that includes overseas oil and gas production, Sinochem Energy operates the groups oil and petroleum products trading, refining, storage and logistics, as well as distribution and retail businesses.

China National Chemical Corp, or ChemChina, has also approached Chinese state-backed investors for up to USD10 billion in funding as part of a reorganization of its agrichemicals business ahead of a public float.

The fundraising efforts and eventual stock market listing are designed to cut ChemChinas debts ahead of a long-awaited mega-merger with state-owned peer Sinochem.
Frank Ning Gao Ning, the chairman of both companies, has encouraged individual business units to tap capital markets ahead of any tie-up, which has been in the works since 2016.

As MRC informed before, in late 2015, Sinochem received approval from the Fujian Provincial Development and Reform Commission for a refinery expansion and petrochemicals project in Quanzhou, the China Chemical Fiber Group reporte. The USD 6.8-billion project will expand the refinery by 25 % to 300,000 b/d from the current 240,000 b/d capacity. The company will also add a 1-million-t/y ethylene cracker, an 800,000-t/y paraxylene unit, a 400,000-t/y polyethylene plant, an aromatics extraction unit with 300,000 t/y of capacity, and secondary units. A schedule for the project was not given.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Sinochem Group engages in energy, agriculture, chemicals, real estate, and finance service businesses in China and internationally. It is involved in the exploration and production, refining and trading, warehousing and logistics, and distribution and retailing of oil and gas. The company also produces and distributes fertilizers, such as nitrogen, phosphate, potash, and other fertilizers.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, paraxylene (PX), homopolymer PP, propylene, ethylene, petrochemistry, ChemChina, Sinochem, China, Russia.
Category:General News
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