Ineos signs major petchem deals with Sinopec

GLOBAL chemicals firm Ineos has signed three back-to-back deals with Chinese chemical giant Sinopec, worth a combined value of £5.7bn (US$7bn).   

As part of the deals, Ineos has agreed to acquire a 50% interest in Shanghai SECCO Petrochemical; a second 50:50 joint venture for ABS (Acrylonitrile Butadiene Styrene) will also be established between the two firms; and a third involves a 50:50 joint venture to build a new HDPE (high-density polyethylene) plant in Tianjin. 

SECCO’s 200 ha facility, located inside the Shanghai Chemical Industry Park, currently has a production capacity of 4.2m t of petrochemicals including ethylene, propylene, polyethylene, polystyrene, butadiene and benzene. 

The plant was built by Sinopec and BP in 2005 at a cost of £2.2bn, but BP retained its stake in SECCO when Ineos bought BP’s subsidiary firm Innovene in the same year – a deal which at the time made Ineos the world’s fourth largest petrochemicals company. BP later sold its share to Sinopec for £1.3bn. 

Ineos’ ABS joint venture will include the 600,000 t/y Ningbo facility that is planned to be operational by the end of 2023, plus a further 600, 000 t/y of new capacity split into two plants to meet rapidly-growing demand in China. One of the 300,000 t/y plants will be located in Tianjin, while the location of the third unit is yet to be decided. 

Along with the new HDPE plant in Tianjin which is expected to be onstream by the end of 2023, the HDPE joint venture could see the completion of at least two additional 500,000 t/y HDPE plants in the future to produce Ineos pipe grade under licence. 

The three agreements, which will have a combined capacity of 7m t/y, and will ultimately generate £8.2bn in annual sales, will help Ineos establish a considerable foothold in China so that it can extend its petrochemicals business, the firm said. 

“These agreements significantly reshape Ineos’ petrochemical production and technology in China. We are pleased to make these major investments with Sinopec in areas that provide the best growth opportunities for both companies,” said IChemE Fellow Sir Jim Ratcliffe, Ineos Chairman and CEO. “Both parties recognise the potential for closer collaboration across a number of other areas as we look ahead.” 

Ineos already has ties with Sinopec following its acquisition of BP’s Acetyls and Aromatics business in 2021. The purchase, worth US$5bn, included Chinese sites in Chongqing, Nanjing, and Zhuhai as well as five plants in the Americas, and two in Europe. 

The firm says it expects each landmark agreement to be completed before the end of the year, subject to regulatory approvals and other conditions.