Keyuan assured of raw material from Shell

February 26, 2012

Keyuan assured of raw material from ShellCHINESE petrochemicals firm Keyuan Petrochemicals has signed a long-term supplier agreement with Shell Petrochemicals, a joint venture between CNOOC and Royal Dutch Shell Group, to purchase butadiene, an essential raw material used in the production of styrene-butadiene-styrene (SBS).

This year will be the first full year of commercial SBS production. In the past twelve months, the price for butadiene has ranged between approximate US$2,144/tonne and US$5,083/tonne, with current prices at approximately US$4,765/tonne. The one-year agreement with CSPC ensures Keyuan has adequate supply of butadiene to meet its 70,000-tonne SBS production target in 2012.

“This agreement provides important stability for one of our new business units,” explained Chunfeng Tao, Chairman and CEO of Keyuan Petrochemicals Inc. “We have secured an adequate supply from a trusted partner and at a reasonable cost. Having recently secured strong orders for SBS, we can now focus on optimizing our production for the remainder of 2012.”

CSPC is a joint venture between CNOOC and Shell Nahai, a subsidiary of the Royal Dutch Shell Group. With its butadiene production facilities located in Huizhou, Guangdong Province and annual production capacity of 165,000 tonnes/year of butadiene, CSPC can conveniently ship materials directly to Keyuan’s production plants in Ningbo.(PRA)

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