Ineos Snags Three Major Chinese Deals

29.07.2022 - It has gone somewhat quiet around new European joint ventures in China of late, but Ineos has just announced three back-to-back projects with Chinese state-owned Sinopec that it said are worth altogether $7 billion and will lead to sales of around $10 billion from 7 million tonnes of production.

The three “landmark" agreements that foresee Ineos taking stakes in Chinese companies will significantly reshape the olefins and polyolefins group’s presence in the People’s Republic, said chairman — and now also CEO — Jim Ratcliffe. "Both parties recognize the potential for closer collaboration across a number of other areas as we look ahead,” he added.

“China is a key growth region for Ineos, and the agreements significantly extend its petrochemicals business with a focus on products where it has some of the leading proprietary technologies,” the multinational group steered from London said.

All of the transactions are subject to regulatory approvals and other conditions. Each is currently anticipated to complete before the end of the year and will be financed through a combination of internal cash resources and external financing.

Projects for ABS and HDPE lead the way

In the first new project, Ineos will take a 50% stake in Sinopec subsidiary Shanghai SECCO Petrochemical Company, which can produce 4.2 million t of petrochemicals, including ethylene, propylene, polyethylene, polypropylene, styrene, polystyrene, acrylonitrile, butadiene, benzene and toluene on a 200-hectare space inside the Shanghai Chemical Industry Park (SCIP).

As part of the second deal, the UK-headquartered player has agreed to establish a new 50:50 joint venture with Sinopec that would build as much as 1.2 million t/y of ABS capacity to meet rapidly growing Chinese demand. The 600,000 t/y plant currently under construction by Ineos Styrolution at Ningbo and due to start up by the end of 20203 will be integrated into the JV.

The ABS joint venture also plans to build two more 300,000 t/y plants that will leverage Ineos Styrolution’s proprietary Terluran process. One of the new units will be located in Tianjin. The location of the third facility has not yet been decided, Ineos said.

A third agreement between the two chemical giants will see Ineos and Sinopec form a 50:50 joint venture that would build a new 500,000 t/y HDPE plant at Tianjin, planned to go on stream by the end of 2023.

Within this JV, the companies have agreed to build at least two additional 50,000 t/y HDPE plants at an undetermined point in the future, which would produce pipe grade HDPE under an Ineos license. 

Ineos acquired other joint ventures with Sinopec through the takeover of BP’s Acetyls and Aromatics business in 2021. The British partner said the two companies also know each other well through two decades of commercial interfaces at various levels, and see “a natural fit to working more closely in the future.”

Commenting on the plans, Sinopec said that, “through this close relationship” it will gain access to some of the best downstream technology in the world, just as Ineos will achieve a substantial presence in China, the fastest growing market in the world.

Author: Dede Williams, Freelance Journalist



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