The Chinese city of Zhoushan said it was in talks with oil major Exxon Mobil Corp  to build a $7 billion ethylene plant in the city south of Shanghai, it said in a statement on Wednesday.

The facility will have annual production capacity of 1.5 million to 1.8 million tonnes, Zhoushan said.

It said when completed, the project would make it larger than the 1.2 million-tonnes-per-year plant Exxon plans in the city of Huizhou in the southern province of Guangdong.

The move comes as China, the world’s top chemical consumer, sets out to complete the biggest expansion in petrochemical production in its history.

The project will involve at least, 13 ethylene complexes planned in the next five years.

The push will also include giving greater access to global majors to its massive chemicals market to produce plastics, coatings and adhesives for fast-growing consumer industries.

Exxon Mobil said last month it signed a preliminary deal to build a petrochemical complex, including an ethylene plant in Huizhou.

At the same time, it agreed to participate in a provincial project to build a liquefied natural gas (LNG) terminal in the city and to supply LNG for it, though no details on timing were given.

Exxon also owns a 25 per cent stake in a refinery and petrochemical plant in Fujian province in partnership with China’s top state refiner Sinopec.

Zhoushan, an island about 145 km (90 miles) South of Shanghai and East of the port of Ningbo said it wanted to attract investment in downstream chemicals.

It said it was particularly interested in  ethylene with local refiner Zhejiang Petrochemical to start a 20-million-tonnes-per-year oil refining and petrochemical complex.

The city government also said it is in talks with United States-based conglomerate, Honeywell, for a 10,000-tonnes-per-year catalyst production project. (Reuters/NAN)