On August 3, Ineos Group disclosed in its second-quarter earnings report that it has officially exited the Sinopec-Tianjin petrochemical joint venture, Sinopec Ineos (Tianjin) Petrochemical Co., Ltd. The joint venture, established in 2023 with a 50:50 equity split between the two parties, came to an end in less than three years.
Under the exit agreement, Ineos will pay Sinopec $120 million, to be settled in 24 equal monthly installments starting from March 2027. Previously, Ineos had recognized a 50% equity investment in the joint venture and related financial liabilities of approximately €575.7 million on its books, all of which have now been derecognized. Ineos first signaled its intention to withdraw in November 2025.
The Tianjin Nangang ethylene project, jointly operated by the two companies, is a key national project under China's 14th Five-Year Plan. It was completed and commissioned at the end of 2024, and completed its first ethylene export shipment in June 2026.
Covering an area of 162.20 hectares, the project is anchored by a 1.2 million tons/year ethylene cracker unit, supported by 13 downstream production units. Among these, the 500,000 tons/year high-density polyethylene (HDPE) unit utilizes Ineos technology, while the 100,000 tons/year polyolefin elastomer (POE), 200,000 tons/year linear alpha olefin (LAO), and 100,000 tons/year ultra-high molecular weight polyethylene (UHMWPE) units employ Sinopec technology.
Ineos stated that the decision to exit was mainly attributed to the persistently weak market environment in China. Since 2025, the two sides have held multiple rounds of discussions regarding the withdrawal. The Chinese market is currently facing dual pressures of severe overcapacity and weak demand, with domestic olefin capacity continuing to ramp up. Market supply-demand dynamics remain loose, profit margins are under pressure, and the project's long-term returns have fallen short of expectations.
Beyond the Tianjin project, Ineos' Shanghai joint venture with Sinopec, SECCO (Shanghai SECCO Petrochemical Co., Ltd.), recorded a loss of €38.1 million in the second quarter of 2026. Although this represents a narrowing compared to the same period last year, it still reflects the intense competition and squeezed profitability in China's domestic basic petrochemical products market.
Following the transaction, the Tianjin Nangang 1.2 million tons/year ethylene project will be wholly owned and independently operated by Sinopec. The project's existing production capacity, operating systems, and export business will continue to operate steadily according to plan, and Sinopec will independently coordinate the second-phase expansion and industrial chain upgrading plans.
However, Ineos has not completely withdrawn from the Chinese market. Its 600,000 tons/year ABS joint venture project in Ningbo remains in operation. In May 2026, Sinopec and Ineos Styrolution jointly established a new high-performance materials joint venture in Tianjin, with registered capital of RMB 1.68 billion. From exiting bulk petrochemical projects to increasing investment in high-performance materials joint ventures, Ineos is repositioning its investment direction in China.
