China's state-owned Sinopec Corp. is in talks to take up to 80 percent stake in troubled paraxylene (PX) producer Dragon Aromatics (Zhangzhou) Co. Ltd., according to a Reuters report.
Taiwanese-owned Dragon Aromatics has seen its plant in Zhangzhou, Fujian province, shut down since April, when an explosion injured more than a dozen people, triggered an evacuation of 30,000 local residents, and took hundreds of firefighters and chemical warfare soldiers to extinguish.
After an investigation of the incident, China's State Administration of Work Safety blamed Dragon Aromatics' “lowest-price” construction bidding process, flawed plant design as well as lax safety control by both company management and the local government. Beijing also ordered a nationwide inspection targeting PX plants.
The Dragon Aromatics plant has an annual capacity of 1.6 million tons and is one of the largest chemical plants in China, according to sources including Reuters.
PX is a building block for PET resin and fiber. China's domestic PX production only makes up for about half of its consumption, which is the largest in the world.
Meanwhile, Reuters also reported that China's largest PX plant is conducting test runs in Ningbo. That plant, owned by Rongsheng Petrochemical Co. Ltd., boasts 2 million tons of annual capacity.
Shenzhen-listed Rongsheng had said Sept. 1 that the Ningbo project was on schedule for equipment testing and that it would use the testing results to determine when to start operation. The company has been strictly referring to the project as an “aromatics” plant, without mentioning paraxylene or PX, in the context of widespread public fear of PX in China.