MOSCOW (MRC) -- China's Shandong province, the country's main independent oil refining hub, has turned to a deep-pocketed state-run coal miner to help fund a petrochemical complex it sees as key to the region's industrial future, said Reuters.
Shandong Energy Group, a provincial government-backed coal producer and utility operator, is set to take a 46.1% stake in the USD20 B Yulong Petrochemical plant, becoming the second-largest stakeholder in the project led by privately run aluminum smelter Nanshan Group, three sources said.
Shandong, China's No.3 economy by province, sees Yulong Petrochemical as a cornerstone project that will upscale its fragmented refining sector - made up of some 60 small oil processors - in line with Beijing's broader push to close inefficient plants and build large, competitive manufacturers.
However, the project, which began construction last October on a man-made island in the port city of Yantai, has faced funding challenges, given its size is similar to Nanshan Group's total assets of 137 B yuan (USD21.5 B) as at-end 2020, the sources said.
Under the latest shareholder structure finalized in late November, Nanshan will hold 51% of the venture, local state-run media dzwww.com reported. That compares with an 86% stake it held earlier in November according to qcc.com, a Chinese business registration portal.
Private chemicals group Wanhua and state-run Hualu Holdings share the remaining 2.9% stake, said two of the sources, who spoke on condition of anonymity because they're not authorized to speak to media. The sizable stake taken by Shandong Energy - a conglomerate specializing in coal mining and power generation with assets worth 693 B yuan (USD108.92 B) - reflected the Shandong provincial government's strong backing and would support bank lending to the project, the sources said.
A Yulong Petrochemical representative declined comment and referred all queries to the provincial government. Shandong government and Shandong Energy did not immediately reply to request for comment.
As per MRC, Oil prices fell on fears about the economic outlook in the world’s biggest oil importer following ratings downgrades to two Chinese property developers, and after some governments took measures to fight the Omicron varaint of the coronavirus. Brent crude futures fell USD1.01, or 1.3%, to USD74.81 a barrel by 12:05 p.m. EDT (1705 GMT), backing off a session high of USD76.70. US West Texas Intermediate (WTI) crude futures were down USD1.00, or 1.4%, at USD71.36 after hitting a peak of USD73.34.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
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