INEOS and Sinopec today 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 US$10 billion in annual sales. This cooperation will reshape INEOS’ petrochemical industry production and technology layout 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. (“SINOPEC”), a subsidiary of China Petroleum & Chemical Corporation (SINOPEC).
Shanghai Secco is located in the Shanghai Chemical Industry Park. The factory covers an area of 200 hectares. The current annual production capacity of petrochemical products is 4.2 million tons, including ethylene, propylene, polyethylene, polypropylene, styrene, polystyrene, and acrylonitrile. , butadiene, benzene and toluene.
Secondly, INEOS and Sinopec will jointly establish a new joint venture company with a 50%:50% equity ratio, aiming to achieve 1.2 million tons/year ABS production capacity to meet China’s rapidly growing demand. The ABS project with an annual production capacity of 600,000 tons is located in Ningbo. INEOS Styrolution is currently responsible for the construction. It is planned to be mechanically completed by the end of 2023. The project will become part of the joint venture company.
INEOS and Sinopec also plan to cooperate and use INEOS’s 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 production capacity of 300,000 tons per 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 with 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 authorize the production of INEOS pipe grade products. 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 between the two parties in business 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 in the future.
Through a closer joint venture and cooperation, Sinopec will obtain a number of world-leading downstream technology licenses from INEOS, and at the same time, INEOS will also achieve greater business scale in the fastest growing Chinese market in the world.
China is an important growth market for INEOS. This series of joint venture cooperation agreements will further expand INEOS’ petrochemical business in China, and the business focus will be to use INEOS’ leading proprietary technology to produce related products.
Sir Jim Ratcliffe, Chairman and CEO of INEOS Group, said: “This cooperation will reshape INEOS’ petrochemical industry production and technology layout in China. We are very honored to develop these cooperations with Sinopec. fields and achieve win-win development. In the future, we will deepen cooperation in more fields and jointly promote the development of the industry.”
