(Yicai Global) Dec. 24 -- LyondellBasell, one of the world's largest plastics, chemicals and refining companies, plans to set up a joint venture with China Petroleum and Chemical, a state-owned energy giant better known as Sinopec.

The 50-50 venture will build a factory in Zhenhai, Zhejiang province, to produce propylene oxide and styrene monomer and sell it to the Chinese market, the Netherlands-founded firm said in a statement yesterday, without disclosing how much the pair will inject into the company. Both compounds play a major role in plastics production.

The agreement will allow LyondellBasell to "take advantage of the fastest growing market in the world for these products," its Executive Vice President Torkel Rhenman said. The companies will take an equal share in the role of marketing the compounds.

China makes up more than 60 percent of Asian chemicals demand and will make up 40 percent of global growth over the next decade, the statement added, citing IHS Markit.

Once up and running, the new facility will produce up to 300 kilo tons per annum of propylene oxide and 600 KTA of styrene monomer. Construction of the plant will begin in early 2020 and it is expected to start operations in 2022.

LyondellBasell already has five factories in China and set up a refinery in Zhenhai with Sinopec in 2007, when the two companies first joined hands. Sinopec owns nearly three quarters of that joint venture, which makes 250 KTA of propylene oxide and 620 KTA of styrene monomer per year.

Editor: James Boynton