(Yicai Global) Sept. 2 -- Dutch chemical giant LyondellBasell Industries finished the phase I construction of a large-scale joint-investment polyolefin plant in Northeast China and put it into operation yesterday.

The petrochemical plant is expected to have among the largest production capacity in China after completion, China Chemical Industry News reported.

News of the JV drove LyondellBasell’s stock [NYSE:LYB] to close 4.55 percent higher at USD68.46.

LyondellBasell and local private company Liaoning Bora Enterprise Group spent USD2.6 billion on the plant’s first stage. The facility’s main products include an 800,000-ton annual output of polyethylene, 600,000 tons of polypropylene and 120,000 tons of butadiene, as well as gasoline, aromatics and other chemicals.

The two firms hope to build more projects based on the first phase as soon as possible in the next 10 years, whose total investment will eventually reach USD12 billion, and the annual processing capacity of light hydrocarbon products of which will reach 3 million tons. They will construct product storage and transport centers in Panjin, Tianjin, Shanghai and Guangzhou.

The two have also started to build infrastructure for a follow-up project with CNY12.2 billion (USD1.8 billion) total investment, which will produce 600,000 tons of acrylonitrile butadiene styrene per year, along with its constituent chemicals.

Local Landmark

Bora started to put up the project in 2017 and LyondellBasell decided to pitch in on it in September last year. The pair formally penned a contract last month, per which each holds 50 percent of the joint venture.

The project is a milestone in LyondellBasell's localization in China, Chief Executive Bob Patel said, adding the company is keen for more chances to expand their production position in the country.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. It currently owns polymer modified material plants in five cities in eastern China.

Bora is one of the biggest private petrochemical companies in Northeast China. Its units have crude oil import qualifications and an annual import quota of 7 million tons, public information shows.

Editor: Ben Armour