BP plc (BP - Free Report) has inked an agreement with a subsidiary of Xin Feng Ming Group Co., Ltd. (Xinfengming) — Dushan Energy Ltd., — to license BP’s latest generation purified terephthalic acid (“PTA”) technology.
Dushan Energy will build a unit with a capacity of 2.2 million tons per annum at the Dushan Port Economic Development Zone in Pinghu, Zhejiang province. Recently, the company completed the basic design of the PTA unit and commenced construction on the site. The project is scheduled to come online in the third quarter of 2019.
Besides the above agreement, the parties also inked a memorandum of understanding (MoU) to extend strategic cooperation along the polyester raw materials value chain. Xinfengming proposes to employ BP’s technologies for all future PTA and related investments.
The MoU includes Xinfengming’s additional investments in PTA phase II employing BP’s most advanced PTA technologies and related products. Moreover, BP and Xinfengming plan to jointly encourage low-carbon products in China based on the country’s shift toward products with enhanced environmental performance.
The internal comparisons between conventional technology and BP's latest generation of PTA technology indicate high investment returns, which considerably lower operational and capital costs. BP’s technology has received several government awards from China, courtesy of considerable environmental performance and its popularity since Zhuhai start-up in 2003.
BP’s consistent endeavor to upgrade its technology is witnessed by the introduction of the latest generation PTA technology in Xinfengming’s Zhuhai plant. This reduced GHG emissions by 65%, water discharge by 75% and solid waste disposal by 95% in manufacturing process compared with conventional PTA technology of the 1990s.
The use of the company’s technology is expected to boost the polyester supply chain of Xinfengming.
In the past three months, BP’s shares have gained 13.2% compared with the industry’s 8.5% rise.
Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Occidental Petroleum Corporation (OXY - Free Report) and China Petroleum and Chemical Corporation (SNP - Free Report) and CVR Refining, LP . These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum is an international oil and gas exploration and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.
Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the last four quarters.
Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.
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