BEIJING, May 3 (Reuters) - Petrochemical firm Dragon Aromatics plans to begin trial operations of its delayed $3 billion paraxylene plant on China's southeast coast later this month, a company official and industry sources said.
Dragon Aromatics, owned by Taiwan's Xianglu Group, is one of China's biggest independent petrochemical producers and potentially a major importer of condensate. The new complex consists of an 800,000 tonne-per-year paraxylene (PX) facility and a 4 million-tpy condensate splitter
'We are now in preparations for test production, which shall start this month. And by end-June the plant should reach a commercial operation level,' said a senior company official, who declined to be named as he was not authorized to speak to media.
The plant, located in Gulei port in Fujian province, was originally slated for start-up around the middle of last year, but was delayed by slower-than-expected construction and a hiccup in gaining environmental clearance, said the official and two other industry sources.
PX, an intermediate in making polyester, is normally produced from naphtha, which can be derived from condensate, a light type of crude oil.
Dragon Aromatics, which has won 4 million tonnes of import quotas for condensate for 2013, would focus on securing feedstock from the spot market for the third quarter, said the company official with direct knowledge of the feedstock procurement.
'We will be looking at supplies such as from Nigeria, Iraq and Russia's Far East,' said the official, adding that Iranian oil would also be considered, depending on cost.
Dragon bought one million barrels of Iranian South Pars condensate at a deep discount late last year, as the sanction-hit Middle East exporter struggled to find buyers due to tough Western sanctions.
A term supply contract would also be considered once production stabilizes, the official said.
Dragon will also need to import atmospheric residue, straight-run fuel oil or vacuum gasoil (VGO) for a 3.17 million tonnes per year hydrocracker at the same site.
The plant was originally designed to use heavy naphtha as a main feedstock. It was later modified to add a condensate splitter, one of the causes for delay as construction plans had be to resubmitted for environmental approval, industry sources said.
(Reporting by Chen Aizhu; Editing by Richard Pullin) Keywords: DRAGON AROMATICS CHINA/
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