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Keyuan Petrochemicals, Inc. (otcqb:KEYP), ("Keyuan" or the "Company"), an independent manufacturer and supplier of various petrochemical products in China, today announced that it has signed a cooperation agreement with Fangchenggang City to build a new production facility in Guangxi Province. The Company expects to commence construction in February 2012.

After conducting extensive preliminary studies for the past 12 months, the Company has decided to build a new petrochemicals production facility, Guangxi Keyuan New Materials Industrial Park, in Fangchenggang City. Keyuan chose this facility due to a combination of factors, including proximity to raw materials supplies, access to stable sources of power and skilled labor, and vast market potential. Furthermore, it could improve the Company's competitive position by extending and expanding its supply chain and manufacturing base. Once the facility is fully operational, Guangxi Keyuan New Materials Industrial Park is expected to have annual production capacity of 400,000 metric tons of ABS (Acrylonitrile Butadiene Styrene).

"This new project is an important component of our long term growth strategy," stated Mr. Chunfeng Tao, Chairman and Chief Executive Officer of Keyuan Petrochemicals, Inc. "It will further diversify our product and customer base, as well as expand our access to the Southern part and Western part of China and the ASEAN (Association of Southeast Asian Nations) markets. We expect to fund this project with bank financing and internal cash flows."

About Keyuan Petrochemicals, Inc.

Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. Having commenced production in October 2010, Keyuan's operations include an annual petrochemical manufacturing design capacity of 720,000 MT for a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilization and yields. In order to meet increasing market demand, Keyuan plans to expand its manufacturing capacity to include a SBS production facility which was completed in September 2011 and is currently on trial production, additional storage capacity, a raw material pre-treatment facility, and an asphalt production facility.