Sinopec may take control of PX maker Dragon Aromatics

Sinopec, China's largest oil refiner and petrochemical producer, wants to build more PX facilities but at least two of its investments have been blocked over the last few years due to opposition from residents worried about pollution.

"It would not be a bad deal for Sinopec, as it would save it all the trouble of going through the lengthy regulatory and environmental approvals," said a second source with a firm that has a supply agreement with Dragon Aromatics.

In Fujian, local officials including a vice-mayor have been punished over April's accident, which was blamed on lax quality control and safety management, according to a Xinhua report in August.

Sinopec, regarded as a seasoned petrochemicals operator, may need to retool the plant to improve safety standards, the sources said. The purchase could also allow Sinopec to increase its purchases of Iranian oil as sanctions are relaxed.

To supply the PX plant, Dragon Aromatics also runs a 100,000 barrels per day condensate splitter and a 3.2 million tons per year hydrocracker at the site.

Dragon Aromatics has been one of the biggest buyers of Iranian condensate, a very light crude oil.