The Chinese major may pay $3bn to purchase a controlling stake in the plant from Dragon Aromatics.
Dragon Aromatics plant explosion Image: Caixan |
Sinopec Corp is in advanced talks with Taiwanese petrochemicals producer Dragon Aromatics to take over one if its plants in Fujian, after two major incidents have called Dragon's safety record into question.
The plant drew criticism after its second explosion in less than two years forced the government to shut it down. It may not open again until Sinopec steps in to help enforce Beijing’s increasingly hardline attitude to environmental and safety issues.
At capacity, the plant could produce as much as 1.6m tons per year of paraxylene, and relies on a 100,000 barrels-per-day splitter and 3.2m tons-per-year on-site hydrocracker to create the product.
Situated on the Gulei peninsula, the Dragon site is located close to other plants operated by Sinopec and CNOOC. Sinopec has seen several PX plant proposals blocked over the last few years due to local concerns around pollution, so Dragon Aromatics’ loss could become their gain.