INEOS signs three major petrochemical deals with Sinopec worth a total of US$7 billion
Latest News: INEOS and Sinopec have signed a series of joint venture agreements with a total value of approximately US$7 billion. The three landmark agreements are expected to achieve a combined annual production capacity of 7 million tons and generate approximately $10 billion in annual sales.
This cooperation will reshape the production and technology layout of INEOS in the petrochemical industry in China. The three joint venture projects between INEOS and Sinopec include:
First, INEOS will acquire a 50% stake in Shanghai Secco Petrochemical Co., Ltd. (“Shanghai Secco”), a subsidiary of China Petrochemical Corporation (SINOPEC).
Shanghai Secco is located in Shanghai Chemical Industrial Park. The factory covers an area of 200 hectares. At present, the annual production capacity of petrochemical products is 4.2 million tons. The production includes ethylene, propylene, polyethylene, polypropylene, styrene, polystyrene, acrylonitrile, butylene. alkene, benzene and toluene.
Second, INEOS and Sinopec will jointly establish a new joint venture with a 50%:50% equity ratio, aiming to achieve 1.2 million tons/year ABS production capacity to meet the rapidly growing demand in China. The ABS project with an annual production capacity of 600,000 tons is located in Ningbo and is currently being constructed by INEOS Styrolution. It is planned to be mechanically completed by the end of 2023, and the project will become part of the joint venture.
INEOS and Sinopec also plan to cooperate to use INEOS’ world-leading Terluran® ABS technology to build two other ABS projects with a production capacity of 300,000 tons per year. One of the ABS projects with a capacity of 300,000 tons/year will be located in Tianjin, and the location of the third project has not yet been determined.
According to the third agreement, INEOS and Sinopec will jointly establish a joint venture company based on a 50%:50% equity ratio to build a new 500,000-ton/year high-density polyethylene (HDPE) project in Tianjin. In addition, INEOS and Sinopec will build at least two 500,000-ton/year high-density polyethylene (HDPE) projects in the future to license the production of INEOS pipe grades. The Tianjin project is expected to be FEED and mechanically completed by the end of 2023.
Since INEOS acquired the acetyl and aromatics business of British Petroleum (bp) in January 2021, INEOS has established a basis for friendly cooperation with Sinopec. Based on the multi-faceted cooperation in business between the two parties for more than 20 years, INEOS and Sinopec have been familiar with each other for a long time, and the cooperation between the two parties will be closer and tacit understanding in the future.
Through closer joint venture cooperation, Sinopec will obtain a number of world-leading downstream technology licenses from INEOS. At the same time, INEOS will also obtain a larger business scale in the world’s fastest growing Chinese market.
China is an important growth market for INEOS, and this series of joint venture agreements will further expand INEOS’ petrochemical business in China and focus on producing related products using INEOS’ leading proprietary technology.
Jim, Chairman and CEO of INEOS Group
Sir Ratcliffe said: “This cooperation will reshape the production and technology layout of INEOS’ petrochemical industry in China. We are very honored to work with Sinopec to explore these areas of cooperation and achieve win-win development. In the future, we will deepen in more fields. Cooperation to jointly promote the development of the industry.”