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INEOS signs new joint venture agreement with SINOPEC in China
INEOS and SINOPEC have announced a new joint venture agreement that will see INEOS acquire a 50% share in the existing Tianjin Nangang Ethylene Project from SINOPEC.
The project is currently building a 1.2 million tonne ethane cracker, which is expected to come on-stream at the end of 2023, and downstream derivative plants in Tianjin, China. A full suite of derivative units is being built at the complex, including 300 kilo tonne per annum (ktpa) of acrylonitrile butadiene styrene (ABS) plant and the 500 ktpa high-density polyethylene (HDPE) plant announced by INEOS and SINOPEC in July.
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 ABS plant will be based on INEOS’ Terluran® ABS technology. It is the second of three ABS plants that will be built and operated in China in partnership with SINOPEC, the first being the 600 ktpa plant currently under construction by INEOS in Ningbo. The HDPE plant, which is also expected to be onstream by the end of 2023, is the first of three planned units to produce INEOS pipe grade with SINOPEC under license in China.
The joint venture agreement was signed at a virtual meeting between Dr. Ma Yongsheng, chairman of SINOPEC and Sir Jim Ratcliffe, chairman of INEOS.
Through this partnership SINOPEC benefits from INEOS’s technological knowledge and operational expertise, and INEOS achieves a substantial presence in China, the fastest growing market in the world.
“This latest joint venture with SINOPEC significantly expands INEOS’ petrochemical production and business footprint in China. It is a further example of the close relationship and growing collaboration between Sinopec and INEOS,” said Ratcliffe.
“SINOPEC and INEOS have enjoyed many years of partnership and this agreement is further testament to the cooperation between our companies, which is taken to a new level. The decision is driven by our dual goals of reducing carbon emissions and managing the energy transition within our businesses, from refining all the way through petrochemicals. SINOPEC will give INEOS a significant local presence and INEOS will contribute its technological and operational expertise, which will create a win-win for the cooperative development of both companies,” said Ma.
This is the fourth venture signed in 2022 with Sinopec. Two are petrochemical complexes and two are product joint ventures. Each is a similar scale.
The transactions are all subject to regulatory approvals and other conditions and will be financed through a combination of internal cash resources and external financing.