Global chemical industry leader Ineos Group Holdings PLC has announced its withdrawal from a petrochemical joint venture with China Petroleum & Chemical Corporation in Tianjin, marking the end of a partnership that lasted less than three years.
In July 2022, Ineos and China Petroleum & Chemical Corporation signed a series of joint venture agreements valued at approximately $7 billion. By early August 2023, the two companies finalized a deal to establish a 50:50 joint venture, Sinopec Ineos Tianjin Petrochemical Co., Ltd., to operate the 1.2 million tonnes per year Tianjin Nangang ethylene project and its downstream chain, which was already under construction by China Petroleum & Chemical Corporation. Under the exit agreement, Ineos will pay a total of $120 million (approximately RMB 800 million) to China Petroleum & Chemical Corporation as an exit fee. This amount will be paid in equal installments over 24 months starting from March 2027. Previously, Ineos had recorded investments and financial liabilities corresponding to its 50% stake in the joint venture, totaling about EUR 575.7 million, but these have now been fully derecognized. Following the transaction, the Tianjin ethylene project will be wholly owned and independently operated by China Petroleum & Chemical Corporation.
The Tianjin Nangang ethylene project, initially invested in by China Petroleum & Chemical Corporation, is a key national project under China's 14th Five-Year Plan and a major initiative to establish Tianjin as a national advanced manufacturing R&D base. Located in the Tianjin Nangang Industrial Zone, the project covers an area of 162.20 hectares. Its original plans include a 1.2 million tonnes per year ethylene cracker and 13 downstream derivative units, covering 500,000 tonnes/year of high-density polyethylene, 300,000 tonnes/year of linear low-density polyethylene, 200,000 tonnes/year of linear alpha-olefins, and 100,000 tonnes/year of polyolefin elastomers (POE). The total project investment is RMB 26 billion. Some units, such as the cracker and polyethylene plants, began production by the end of 2024. In 2025, the project achieved 100% green electricity supply, becoming China Petroleum & Chemical Corporation's first fully green-powered factory. By June 2026, approximately 5,000 tonnes of ethylene produced by the project were successfully exported to South Korea, marking the first ethylene export from the Tianjin port. Based on progress, the joint venture had entered substantial operational phases and was performing well.
Ineos cited the persistently weak market environment in China as the primary reason for its exit. The two parties have held multiple rounds of discussions on the withdrawal since 2025. Ineos first confirmed negotiations regarding a potential exit from the Tianjin joint venture in November 2025, meaning it took about seven months from initially signaling the intention to formally signing the agreement. From an industry perspective, the domestic olefins market is experiencing continuous concentrated capacity releases, leading to a loose supply-demand balance and compressed profit margins. Meanwhile, the global chemical industry is undergoing a massive capacity adjustment cycle. With BASF closing plants in Germany, Dow Chemical shuttering facilities in the Netherlands, and Ineos closing its last synthetic ethanol factory in the UK, overseas chemical giants are accelerating their exit from high-cost regions. The Tianjin joint venture withdrawal is not an isolated strategic adjustment for Ineos. In 2026, the company successively shut down its 430,000 tonnes/year styrene base in Canada and plans to close a 400,000 tonnes/year polystyrene plant in the United States. On the performance front, Ineos reported a 19.4% year-on-year decline in first-quarter 2026 revenue. Additionally, another core joint venture between Ineos and China Petroleum & Chemical Corporation, Shanghai SECCO, still recorded a EUR 38.1 million loss in the second quarter of 2026.
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