(Yicai Global) Jan. 26 -- China Petroleum and Chemical will team up with global chemical giant LyondellBasell Industries to produce propylene oxide and styrene in eastern China.

The pair has penned a deal to form a 50:50 joint venture to build a factory in Ningbo to make 275,000 tons of propylene oxide and 600,000 tons of styrene each year, the Paper reported, without disclosing the scale of investment. The agreement is pending regulatory approvals.

Setting up the JV is an important step for the Chinese firm to advance its international operations, said Yu Baocai, senior vice president of the oil refining giant also known as Sinopec. The two companies signed a memorandum of understanding about the JV first in December 2019.

China’s demand for propylene oxide and styrene will rise as the country’s economy is growing, said Torkel Rhenman, executive vice president of LyondellBasell's intermediates, derivates, and refining business. These chemicals are used widely in detergents, plastics, and cosmetics.

LyondellBasell has five plants in China. The multinational corporation has been raising its investment in the Asian country in recent years to serve the rapidly developing market.

Editor: Emmi Laine