(Yicai Global) March 2 -- Jinneng Science & Technology Co. has penned a CNY20-billion (USD3.2-billion) deal as it looks to ramp up chemical production in eastern China.

Xihai'an New District in Qingdao, Shandong province, will supply the funds, the company said in a statement. The first phase of Jinneng's plan involves a CNY9-billion propane dehydrogenation facility capable of producing 900,000 tons of propylene every year, a carbon black recycling facility with an annual capacity of 480,000 tons, and a 450,000-tons-a-year high-performance polypropylene plant.

Propylene is a critical ingredient in petrochemicals, a rising sector in China. Yousef Al-Banyan, chief executive officer of industry giant Saudi Basic Industries Corp., believes China will contribute about 50 percent of all incremental chemicals growth between 2016 and 2025, state-owned news agency Xinhua quoted him as saying in November.

Jinneng hopes to complete phase-one construction and begin trial production by the end of June 2020, before embarking on the second stage, which is still in the pipeline. It hopes the first phase will have paid for itself after seven and a half years, including the construction period.

The management committee of Xihai'an will help the company secure land, raise funds, obtain permits and coordinate with external parties, the statement said.