China: strong development in Tianjin

Located 120 kilometers southeast of Beijing and with more than 10 million people, Tianjin is one of the most dynamic cities in China.

It has a very long commercial and industrial history thanks to its ideal location close to Beijing on the Bohai Bay. It is becoming the third national economic development center, after Guangdong and Shanghai.

Air Liquide announces the start-up of a long term supply of industrial gases to Sinopec Tianjin Petroleum and Chemical Corporation (TPCC), in Tianjin. Air Liquide created a 50/50 joint venture company earlier this year with TPCC in Dagang Tianjin (Air Liquide TPCC), which has just taken over the Air Separation Units (ASU) as well as the associated teams of the existing TPCC facility. It is also building a new 1,000 tonnes/day ASU necessary for the new TPCC refinery and ethylene cracker. The total investment of the joint venture is about €45 million. The new ASU unit is being manufactured by Air Liquide Hangzhou, the Air Liquide engineering centre in China, providing both high reliability and high energy efficiency, in line with Chinese government objectives.

Air Liquide has been steadily developing the Tianjin market. The Group was first present in Tianjin in 1995 with an ASU and two hydrogen units. In April 2007, Air Liquide commissioned another new unit in Tianjin located in Tianjin Binhai New Development District, supplying LG Bohai Chemical Co., Ltd. Its joint venture with Tianjin Soda, Air Liquide Yongli, is currently investing in two new ASUs of 2,000 tonnes/day each to supply oxygen and nitrogen to Tianjin Soda in the same District. The units will start beginning of 2009. Total investment decisions of Air Liquide in Tianjin have already reached more than €200 million and are expected to increase further.

Jean-Pierre Duprieu, Senior Vice-President in charge of Asia Pacific and member of Air Liquide’s Executive Committee, said: “We are very pleased to start this new operation in Tianjin with TPCC, which has decided to outsource its industrial gas needs. It opens new possibilities for Air Liquide to cooperate further with Sinopec. We have now reached a very significant presence in Tianjin and we are continually strengthening it in this fast growing market. Air Liquide will continue to accelerate its investments in China with at least €300 million per year 2007-2011, three times more per year than during the 2004-2006 period.”

Mr. Xu Hongxing, Chairman of TPCC, said: “It is the first joint venture for TPCC and it constitutes a milestone in the cooperation between Sinopec and Air Liquide. We believe that it is a good initiative to outsource our industrial gases to a specialist. We see a bright future for our partnership.”

TPCC is a branch of Sinopec operating in Dagang District (Tianjin) with around 10,000 people and more than 20 billion Rmb sales. The existing facility has a five million tonnes/year refinery, a 200 ktonnes/year ethylene, a 200kttonnes/year fibers and a 70 ktonnes/year polyether polyols plants. On the same site, Sinopec is developing a new project with a total investment 20.1 billion Rmb, including a refinery of 10 million tonnes/year and an ethylene cracker of 1 million tonnes/year with an expected start up by end of 2009.