A group of 10 LPG buyers in China has teamed up to increase their bargaining power and help cut import costs.
The new ethane and propane purchasing group held its first meeting in Shenyang, Liaoning province last week, under the auspices of industry association the China petroleum and chemical industry federation (CPCIF).
The group has been set up as a platform to co-ordinate resources among its members and will not buy raw materials itself, although member companies may look to jointly buy LPG in the future.
Its members include Shenzhen Grand Resource that has bought on line a new 20,000 b/d propane dehydrogenation (PDH) plant at Dongguan in south China, Ningbo Huatei Wealthy Polymer Material that is due to start up a new PDH plant at the end of this year, independent refiner Shandong Landbridge Petrochemical and other companies in Liaoning, Shandong, Zhejiang, Fujian, Guangdong and Guangxi provinces.
The group's chairman is Zhang Tong, vice president at state-controlled PetroChina International, the overseas trading arm of PetroChina.
The expansion of China's PDH capacity and potential ethane-to-ethylene projects is posing new challenges to LPG purchasing and financing, Zhang said. The group, with support from the CPCIF's light and heavy hydrocarbon committee, will help its members reduce market risk and lower purchase costs, he said.
