INEOS signs MOU with Sinopec for Nanjing phenol joint venture

27 January 2011 13:00  [Source: ICIS news]

LONDON (ICIS)--INEOS has signed an agreement with Sinopec on a joint venture (JV) to build a 400,000 tonne/year phenol plant in Nanjing, China, it said on Thursday.

The companies have signed a memorandum of understanding (MOU), agreeing the framework for the design and future operation of the phenol/acetone JV at the Nanjing Chemical Industrial park in Jiangsu province.

Annual capacity will be 400,000 tonnes/year of phenol and 250,000 tonnes of acetone, making it the largest plant of its kind in China, the Switzerland-headquartered chemical group said in a statement.

The facility, expected to be completed by the end of 2013, will also include 550,000 tonnes/year of cumene capacity.

Tony Traynor, CEO of INEOS Phenol, said: “Signing the MOU is an essential step as we work towards establishing a joint venture and marks a major milestone in our relationship with Sinopec YPC

”This joint venture will allow INEOS to bring its proprietary phenol technology to China and teaming with a strong, local partner like Sinopec YPC will bring considerable value to our business and our customers.”  

The MOU was preceded by a letter of intent signed in December 2009 and follows a detailed evaluation of the investment.

Financial details were not disclosed. 

On Wednesday, INEOS director Tom Crotty told ICIS how the companies planned to move forward with the project.

“The next phase is to turn that letter of intent into a proper memorandum of understanding, which is the next stage before a finished contract," he said.

“This will describe how [the joint venture] would work, which will then lead to the signing of binding contracts,” he added. 

“We hope to make progress during this year in getting everything signed up so that we can start construction in 2012,” Crotty said.

Earlier this month, INEOS signed framework agreements with PetroChina and its parent company, China National Petroleum Corporation (CNPC), related to partnerships in refining, trading and petrochemicals.

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By: Graeme Paterson
+44 20 8652 3214

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