BASF lets contracts for Zhanjiang petrochemical megacomplex

BASF SE has let two contracts to Fluor Corp. to provide engineering, procurement, and construction management (EPCM) services for the addition of a new unit and related infrastructure as part of the ongoing construction of subsidiary BASF Integrated Site (Guangdong) Co. Ltd.’s grassroots Verbund chemicals manufacturing site in Zhanjiang, Guangdong Province, China.

As part of the contracts covering two primary packages of the site’s development, Fluor will deliver EPCM services for a new ethylene oxide (EO)-ethylene glycol (EG) derivative unit, as well as for infrastructure, offsites, and utilities, including unidentified site infrastructure, utility generation, and site logistics, the service provider said.

Performance of additional unidentified services as part of the project’s centralized program management team activities are also covered by the contracts, according to Fluor.

In its early October announcement, Fluor confirmed the combined value of the two reimbursable EPCM contracts at more than $2 billion, which the service provider booked in third-quarter 2022.

Contract awards for the EO-EG unit and associated infrastructure packages for the Zhanjiang complex follow BASF’s September 2022 commissioning of the site’s first plant, which will initially produce 60,000 tonnes/year (tpy) of engineering plastics before increasing production capacity to 420,000 tpy in 2023 to meet growing demand by the Asia Pacific’s automotive and electronics industries, BASF said on Sept. 6.

Startup of the first plant at the integrated Zhanjiang Verbund site follows BASF’s final investment decision (FID) in July 2022 to move forward with main construction of the project’s core production complex, including a steam cracker equipped to produce 1 million tpy of ethylene for use in a series of unidentified downstream derivatives units planned for the complex.

First announced in 2018 and officially cleared for construction of early units in late 2019, the Zhanjiang Verbund integrated production site will require an overall investment of more than $10 billion—BASF’s largest ever—by its full completion in 2030, the operator said.

Designed to serve as a global role model for smart manufacturing and sustainable production, the Zhanjiang Verbund site—which is to be powered with 100% renewable electricity by 2025—currently is slated to commission its second plant—which will produce thermoplastic polyurethanes (TPU)—in 2023, with startup of the complex’s steam cracker to follow in late 2025.

An expansion phase involving construction of additional downstream plants for production of other petrochemicals and intermediates is scheduled to completed and in operation by 2028, according to BASF.

Part of the operator’s Verbund approach that implements advanced digitalization technologies into plant operations to improve production reliability and efficiency, BASF said its Zhanjiang Verbund integrated chemical manufacturing hub supports the company’s commitment to meeting the Asia Pacific’s rising demand for basic chemical components in a way that also advances a regional circular economy in line with the global energy transition.

Supporting its goal of net-zero emissions by 2050, BASF signed a purchase agreement for renewable electricity with China Resources Power of Hong Kong in June 2021 to enable operation of the first plants at Zhanjiang Verbund entirely on renewable energy, the operator said in its 2021 annual report to shareholders.