LONDON (Reuters) - BP (L:BP) is increasing its Asian presence with an initial agreement, or memorandum of understanding, with China's Zhejiang Petroleum and Chemical Corporation (ZPCC) to build a 1 million tonne a year acetic acid plant, BP said on Friday.
The planned production site for acetic acid, which is used in chemical products such as paints and adhesives, would be part of ZPCC's refining and petrochemical plant in Zhoushan in eastern China, BP said in a statement.
"The potential new plant...would be BP’s largest acetic acid producing site in the world. China is the world’s largest acetic acid market and accounts for more than half of global production capacity," BP added.
BP plans to sell more U.S. crude to Asia as its shale oil production grows, seeking to capitalise on growth in the world's key demand region.
In recent months, the British group deepened its ties with Indian conglomerate Reliance Industries (NS:RELI) by forging a fuel retailing joint venture to capitalise on rising demand in Asia's third-biggest economy.
BP has also said it would build a network of charging hubs for electric vehicles with China's Didi Chuxing, betting on the world's largest market for such cars.
ZPCC is a mixed-ownership joint-venture company with private holdings and state-owned enterprises, BP said.
A PetroChina unit has won a license to supply marine bunker fuel in Zhoushan on China's east coast, as the city's free trade zone looks to challenge Singapore as a regional shipping fuel hub, according to a company executive and local government official.