Keyuan signs long-term butadiene supply deal with Shell

ERJ staff report (DS)

Ningbo, China - Keyuan Petrochemicals Inc. has signed a long-term supplier agreement with Shell Petrochemicals Company Limited ("CSPC"), a joint venture between CNOOC and Royal Dutch Shell Group, to purchase butadiene.

This year (2012) will be the first full year of commercial SBS production for Keyuan. In the past twelve months, the price for butadiene has ranged between approximate $2,144/t and $5,083/t, with current prices at approximate $4,765/t. The one-year agreement with CSPC ensures Keyuan has adequate supply of butadiene to meet its 70,000-ton SBS production target in 2012.

"This agreement provides important stability for one of our new business units," explained Mr. Chunfeng Tao, Chairman and Chief Executive Officer of Keyuan Petrochemicals Inc. "We have secured an adequate supply from a trusted partner and at a reasonable cost. Having recently secured strong orders for SBS, we can now focus on optimizing our production for the remainder of 2012."

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Press release from Keyuan