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BP Confirms Plans For Further Petrochemicals Growth in China Including Debottlenecking of BP Zhuhai

BP today confirmed that it is proceeding with its project for a major increase in purified terephthalic acid (PTA) production capacity at the BP Zhuhai Chemical Company Limited (BP Zhuhai) site in Guangdong Province, China, a JV between BP and Zhuhai Port Co., Ltd. (formerly named Fu Hua Group) and also announced that it is planning to build a new world-scale PTA plant at the same site.

The planned debottleneck at Zhuhai will increase capacity by more than 200,000 tonnes a year from its second unit (Z2), making the total PTA production capacity of the Zhuhai site some 1.7 million tonnes a year.

BP has completed engineering design work for the Z2 debottleneck and expects the expansion to be fully operational in 1Q2012.

A new third PTA plant in Zhuhai is under pre-engineering planning. With a capacity of 1,250,000 tonnes per year, it will be the first to employ BP's latest generation PTA technology and, subject to approval from its shareholders and relevant Chinese government agencies, is expected to come on stream earliest 2014 to meet PTA demand growth in China. This will make Zhuhai the largest PTA site in BP's global PTA system.

Sue Rataj, BP's Chief Executive in Petrochemicals, said: "This investment will be the world's largest single train PTA plant, built in the world's largest and fastest growing PTA market with the world's best and lowest cost technology - once again reinforcing BP's commitment to the PTA business and to China."

The new technology will deliver a step change in environmental performance, particularly reducing both greenhouse gas emissions and other waste streams significantly. It enables scale and cost efficiencies which significantly reduce both capital cost and conversion costs to lower levels than any other PTA technology.

"The significantly reduced environmental and energy footprint of the new technology will help China meet its commitments to environmental protection, energy savings and safety, and should set a new standard for the industry," said Rataj.

James Yim, President, BP Aromatics Asia and China Olefins & Derivatives added: "With the deployment of this new technology, we will be the most competitive PTA producer in the world. We will actively pursue additional PTA investment options in other area of China as well as other growing markets in Asia."

The new technology to be used at the expansion of the existing Zhuhai site is also applicable across BP's global PTA system, enabling new globally competitive expansion options. Notes to editors:
  • PTA is the preferred raw material used to manufacture polyethylene terephthalate, a widely used polyester polymer for the production of textiles, bottles, packaging and film products. Government statistics showed that China's PTA consumption in 2009 exceeded 18 million tonnes, of which only around 65 per cent was supplied by domestic production.
  • BP Zhuhai was formed as a joint venture between BP (85 per cent) and Zhuhai Port Co., Ltd. (formerly named Fu Hua Group) (15 per cent) in 1997. The venture's first and second PTA plants, with total capacity of some 1.5 million tonnes a year, began production in 2003 and 2008 respectively.
  • BP Zhuhai has met the ISO14001 environment standard, ISO9001 quality standard and OSHA18001 health standard in its first year of operation. This is the first project in China's chemical industry to-date that has passed all 3 standards in the first year. It also set a new benchmark for China's chemical industry. The State Environmental Protection Administration has listed the project as a role model.
  • BP has been a leader in PTA for over 30 years, with a global market share of 15 per cent on an equity basis (or 18 per cent including joint ventures). BP operates 21 PTA plants located in Asia, the Americas and Europe with a total combined annual production capacity of more than 10 million tonnes.
  • BP is one of the world's largest oil, gas and petrochemicals groups, generating revenues of over $300 billion in 2010, among which Refining & Marketing Segment generated over $260 billion with profits before interest & tax of over $7.2 billion. BP employs about 80,300 people worldwide and has activities in more than 80 countries. The company is one of the leading foreign investors in China, having invested close to $5 billion in commercial projects in the country. Its activities in China include production and importation of natural gas, supply of aviation fuel, import and marketing of LPG, fuels retailing, lubricants blending and sales, and petrochemical manufacturing. BP employs over 4,000 staff in China, either directly or through joint ventures.
  • BP has historically run the PTA plant with excellent safety track record and the new plant will continue to be a leader in healthy, safety, security and environment. We continue to drive down the environmental and health impact of our operations by reducing waste, emissions and discharges, and using energy efficiently. We will produce quality products that can be used safely by our customers.
  • Zhuhai Port Co., Ltd. (formerly Fu Hua Group ) was established in 1986 and became the first Zhuhai company to be listed on the Shen Zhen Exchange (stock code: 000507) in the People's Republic of China in 1993 with a registered capital of 345 million RMB and total assets of 1.2 billion RMB. Zhuhai Port Co., Ltd has now formed three major business categories, including port logistics, comprehensive development of port real estate and investment in power energy. Total assets of the company are 1,724,920,497.27 yuan. In 2009, it realized 410,791,728.00 yuan of operating income and 103,905,115.53 yuan of total profits.

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