British petrochemicals company Ineos has signed a deal to acquire a 50% interest in the Tianjin Nangang Ethylene Project, currently under construction by China Petroleum and Chemical Corporation (Sinopec).

The complex, which is expected to come onstream at the end of 2023, will include a 1.2 million tonne per annum cracker plant and 12 other derivative facilities, including an acrylonitrile butadiene styrene plant and a high-density polyethylene plant. Some of the facilities are using technology licensed by Ineos.

A joint venture agreement was signed at a virtual meeting between Sinopec chairman Ma Yongsheng and Ineos chairman Jim Ratcliffe.

“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,” says Ma. “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.”

Slaughter and May is advising Ineos on the joint venture, which is subject to regulatory approvals and other conditions, and will be financed through a combination of internal cash resources and external financing.

Ineos is a global manufacturer of petrochemicals, speciality chemicals and oil products. Comprising 36 individual businesses, the group operates 194 facilities in 29 countries.

This is Ineos’ fourth venture with Sinopec signed in 2022. Slaughter and May has also been advising Ineos on the three other joint ventures with the Chinese petrochemical group with an aggregate value of US$7 billion.

In the first deal, Ineos agreed to acquire a 50% stake in Shanghai Secco Petrochemical Co Ltd, a Sinopec subsidiary. The company owns a 200-hectare facility inside the Shanghai Chemical Industry Park.

Ineos also agreed to establish a new 50:50 joint venture with Sinopec with the intent to build production capacity of up to 1.2 mtpa of acrylonitrile butadiene styrene (ABS). There is a rapidly growing demand for thermoplastics used in making pipes and automotive body parts in China.

A 600ktpa ABS plant in Ningbo, which is currently under construction by Ineos Styrolution and is scheduled to be operational by the end of 2023, will become part of the joint venture. In addition, Ineos and Sinopec plan to work together on two additional 300 ktpa ABS plants, which will also be built by the joint venture.

The third agreement will see Ineos and Sinopec build a new 500 ktpa high-density polyethylene (HDPE) plant as part of the Tianjin Nangang Ethylene Project. In addition to the Tianjin plant, Ineos and Sinopec will build at least two additional 500 ktpa HDPE plants in the future to produce Ineos pipe grades under licence.