A special petrochemical industrial development zone is taking shape in Guangdong's Zhuhai Special Economic Zone, with more than 50 petrochemical companies from Taiwan now negotiating to set up their firms, joint ventures and development and research centres in the Zhuhai Cross Strait Petrochemical Industrial Development Zone near Gaolan Port in the city.

The zone, which focuses on attracting big-name petrochemical companies from Taiwan, will give priority to the development of downstream industries of ethylene and related sectors, including plasthetics and plastic industries.

Five companies have, so far, begun operation in the zone that covers an area of more than 20 square kilometers.

In the next 10 years, the Zhuhai municipal government has decided to invest more than 120 billion yuan (US$14.46 billion) to develop petrochemical projects and improve the infrastructural facilities in the zone; of which 9 billion yuan (US$1.1 billion) will be used before the end of the year.

With the construction of the zone, Zhuhai is expected to become a new coastal petrochemical centre in South China; and compete with Daya Bay in Huizhou, where China's biggest foreign-funded Shell Petrochemical Project is located.

The petrochemical industry is expected to become a pillar sector in Zhuhai - British Petroleum (BP) has set up a 1-billion-yuan (US$120 million) petrochemical project in Zhuhai last year.

To help attract more overseas investors, the Zhuhai government is planning to expand its Gaolan Port to be able to handle 300,000-ton cargo liners; currently, it can only cope with 80,000-ton ships. Its handling capacity is expected to reach more than 12 million tons this year.

In addition to Zhuhai, the coastal cities of Zhanjiang, Maoming, Huizhou and Guangzhou are also investing large sums of money to build and expand major petrochemical projects, aiming to build Guangdong into China's biggest petrochemical production base, according to an official from the Guangdong Provincial Development and Planning Commission yesterday.

Huizhou, Guangzhou and Maoming ethylene projects will each have a production capacity of 800,000 tons annually in the years ahead.

Located in Daya Bay Economic and Technological Development Zone, the Huizhou Ethylene Project which is jointly owned by Royal Dutch/Shell and domestic investors will see large-scale construction before the end of this year; and is set to start production by the end of 2004.

The expansion of Guangzhou and Maoming ethylene projects will formally commence this year, the official said.

By the end of 2006, Guangdong will be able to reach ethylene industrial production of more than 1.8 million tons, becoming the largest ethylene production base in the country. The province now produces about 580,000 tons of ethylene products a year, which is expected to touch 1.6 million tons in 2005 and 3.6 million tons in 2010.

Meanwhile two new oil refineries will also built in Guangzhou and Zhanjiang respectively later this year; with a refining capacity of more than 10 million tons each, they will help increase Guangdong's oil refining capacity to more than 42 million tons when they are completed and operation begins in 2006.

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