BASF and Huntsman have confirmed their plan to build and operate an integrated isocyanates manufacturing facility in Shanghai. The companies have signed an agreement to submit a joint feasibility study report in the presence of Chinese Premier Zhu Rongji and German Chancellor Gerhard Schröder.

The agreement was signed by Helmut Becks, member of the board of executive directors of BASF AG and Donald Stanutz, senior vice president of Huntsman as well as by their joint venture partners. A joint feasibility study report has been submitted to the Shanghai Municipality. The integrated isocyanates complex consists of three separate joint ventures:

* A 160,000 metric tons per year crude MDI manufacturing plant including manufacturing facilities for the precursors aniline and nitrobenzene which will be built by BASF, Huntsman, Shanghai Chloro-Alkali Chemical Co Ltd, Shanghai Hua Yi Company, China Petroleum and Chemical Corporation, and Sinopec Shanghai Gao Qiao Petrochemical Corporation.

• An MDI finishing plant and a 130,000 metric tons per year TDI plant with precursors nitric acid and dinitrotoluene to be built by BASF and their partners: Shanghai Hua Yi (Group) Company, China Petroleum and Chemical Corporation and Sinopec Shanghai Gao Qiao Petrochemical Corporation.

* An MDI finishing plant to be built by Huntsman and Shanghai Chloro-Alkali Chemical Co Ltd.

The total investment for the complex is around $1 billion. The products from the world-scale crude MDI manufacturing joint venture will be sold on an equal basis to the two separate MDI finishing joint ventures for further processing and independent marketing and sales to the polyurethane industry in China.

The TDI plant will be the first of its kind in China. It is expected that the entire complex, the second largest investment of BASF in China, will take three years to build after the formal approval by the Chinese government.