(Yicai Global) March 22 -- Satellite Petrochemical and France’s Air Liquide have agreed to build a large chemicals project at a cost of CNY11.5 billion (USD1.77 billion) and use the hydrogen by-product to promote a hydrogen energy industry ecosystem in the Yangtze River Delta region.

China’s biggest acrylic acid producer signed a deal with Air Liquide China and the government of Pinghu, a city in Zhejiang province, on March 20, the company said in a statement late yesterday. Construction work is scheduled to start before November and the project is due to come online before June 2024.

Zhejiang-based Satellite Petroleum will contribute about CNY10.2 billion to the project, the statement said, without disclosing whether the remaining CNY1.3 billion (USD200 million) will be entirely footed by Air Liquide China.

The project will have a production line with annual output of 800,000 tons of propylene through propane dehydrogenation and supporting equipment. An 800,000 tons a year butyl-octyl alcohol production line and a 120,000 tons a year neopentyl glycol production line are also part of the project.

Shares of Satellite Petroleum [SHE: 002648] closed 1.5 percent higher today at CNY38.43 (USD5.91), after earlier climbing as much as 7 percent. The broader Shenzhen Component Index added 1.1 percent.

Satellite Petrochemical has been actively promoting the hydrogen energy industry’s development in recent years. Air Liquide China plans to make use of the abundant hydrogen generated by the project to invest in the construction of fueling stations and liquefaction plants in the local area to meet hydrogen energy needs in the Yangtze River Delta region and form a hydrogen energy cooperation ecosystem.

It aims to build hydrogen fueling stations with annual output of 3,000 tons in the first phase, and hydrogen liquefaction plants with annual output of 11,000 tons and supporting facilities in the second phase.

Editor: Peter Thomas