SINOPEC will build a 7 billion yuan (US$1.1 billion) petrochemical complex in Chongqing in southwest China with British oil major BP Plc and South Korea's SK Group.

The three companies signed a memorandum of understanding yesterday for the project which will include a 600,000 ton-a-year acetic acid plant and a 200,000 ton-per-year BDO facility.

The acetic acid plant will be built by a joint venture that's 51 percent owned by BP, 44 percent held by Sinopec and 5 percent by Chongqing Energy Investment Group. An equally-owned venture between SK and Sinopec will invest in the BDO plant, according to SK.

Acetic acid is a key organic chemical feedstock in the petrochemical industry, used in textile, pharmaceutical and pesticide production. BDO, or bio-butanediol, is used as a solvent in producing polymers, solvents and fine chemicals.

The complex may consume about 440 million cubic meters of natural gas per year, according to a joint statement. Sinopec holds large gas reserves in Chongqing and the southwestern province of Sichuan.

The partners have completed a feasibility study for the project and submitted it to the government for approval, and intends to complete the project in phases in 2015.