INEC exits Tianjin ethylene joint venture with $120 million; Sinopec takes full ownership

On August 3, global chemical giant INEOS Group officially announced that it has fully withdrawn from the Tianjin Petrochemical joint venture partnered with Sinopec. This means that the 50:50 joint venture, which was high-profilely launched in 2023 with a total value of $7 billion, has been completely terminated in less than three years, becoming a significant recent event regarding foreign strategic adjustments in the domestic petrochemical industry.

According to INEOS's unaunted second-quarter financial report disclosed in late July 2026, the company signed a formal exit agreement with Sinopec in June 2026, completely withdrawing from all investment rights in Sinopec INEOS (Tianjin) Petrochemical Co., Ltd. Looking back at the process, INEOS first revealed its intention to negotiate an exit to the public in November 2025. After 7 months of negotiations to finalize the agreement, the complete exit process was concluded.

Exit terms clarified: $120 million in installments, full termination of book liabilities

The financial terms of this exit transaction have been clearly established. According to the agreement between the two parties, INEOS is required to pay Sinopec an exit fee of $120 million, which will be paid in equal installments over 24 months starting in March 2027.

On the financial level, INEOS has completed the full accounting write-off for this joint project. The corresponding 50% equity investment and financial liabilities previously recorded on the books, totaling approximately 575.7 million euros, have now all been derecognized, completely stripping the project's financial associations.

National key project achieved impressive results, setting multiple industry benchmarks

The Tianjin Nangang Ethylene Project is a key project of the national "14th Five-Year Plan" and a core project in Tianjin's high-end petrochemical industry layout. The project was initially led by Sinopec. In July 2022, the Chinese and British sides finalized a series of joint venture agreements, and in August 2023, a 50:50 joint venture company was formally established to jointly operate the 1.2 million tons/year ethylene core unit and its supporting industrial chain.

The project is located in the Tianjin Nangang Industrial Zone, covering an area of 162.20 hectares. The overall plan includes a 1.2 million tons/year ethylene cracking unit and 13 downstream derivative units, featuring a comprehensive industrial chain layout and massive industrial scale.

The project achieved highlights during its operation: by the end of 2024, core units such as the cracking unit and polyethylene plant successfully commenced production; in 2025, it achieved 100% green electricity supply, becoming the first fully green-powered petrochemical plant within the Sinopec system; in June 2026, the project successfully exported 5,000 tons of ethylene to South Korea, securing the first ethylene export business at the Tianjin port, with industrial value continuing to be released.

Global chemical capacity restructuring, industry downturn combined with loss pressure are main reasons for exit

This exit is not a single project adjustment but a strategic contraction move by INEOS aligning with the cycle of major global chemical capacity adjustments. The current international chemical industry is under continuous pressure. Overseas giants such as BASF and Dow Chemical have successively shut down facilities in high-cost regions, accelerating capacity optimization and regional withdrawal.

In addition to the Tianjin project, INEOS and Sinopec's Shanghai SECCO joint venture recorded a loss of 38.1 million euros in the second quarter of 2026. Although the loss narrowed year-on-year, it continues to reflect the current status of fierce competition in the domestic basic petrochemical products market and profit pressure, serving as a significant incentive for INEOS to contract its traditional petrochemical business in China.

Global intensive capacity shutdowns, INEOS comprehensively advancing business structure optimization

In the past two years, INEOS has initiated global capacity slimming-down and business focus, intensively shutting down inefficient and loss-making traditional chemical capacities: closing the 430,000 tons/year styrene production base in Canada before June 2026; planning to shut down the 400,000 tons/year legacy polysyrene plant in the US in the fourth quarter of 2026, continuously stripping low value-added basic chemical capacities.

In terms of performance, INEOS's revenue in the first quarter of 2026 was 3.372 billion euros, a year-on-year decline of 19.4%; second-quarter performance rebounded strongly, with EBITDA reaching 1.133 billion euros, a year-on-year increase of over 2.6 times. This performance divergence is also driving the company to accelerate the stripping of inefficient assets and focus on high-profit tracks.

Presence in China has not retreated; retaining high-quality projects to achieve differentiated layout

It is worth noting that exiting the traditional Tianjin petrochemical project does not mean INEOS is withdrawing from the Chinese market. The company currently still operates the Ningbo 600,000 tons ABS high-quality joint venture project normally, continuing to cultivate the domestic high-end new materials field.

At the same time, in May 2026, Sinopec and INEOS Styrolution jointly established a Tianjin High-tech Materials Joint Venture Company with a registered capital of 1.68 billion yuan, marking INEOS's differentiated strategy in China of actively contracting traditional bulk petrochemicals and increasing investment in high-end fine new materials.

Project ownership settled, Sinopec to fully take over and continue operations

With INEOS's complete exit, the Tianjin Nangang 1.2 million tons/year ethylene project will be wholly owned and independently operated by Sinopec. The project's existing capacity, production system, and export business are all proceeding steadily as planned. The unit production, market supply, and industrial chain supporting facilities are not affected by the equity change, continuing to guarantee a stable supply for the regional petrochemical industry.