INEOS AG subsidiary INEOS Styrolution Group GmbH has agreed to purchase the entirety of BP PLC’s standalone global petrochemical assets in a deal worth $5 billion.
The proposed sale—which includes INEOS’s purchase of 14 of BP’s petrochemical manufacturing plants in the Asia Pacific, Europe, and the Americas focused on aromatics production of aromatics and acetyls, as well an option to acquire BP’s research complex in Naperville, Ill.—is scheduled to close by yearend 2020, pending regulatory and other approvals, BP said on June 29.
Under terms of the agreement, INEOS will pay BP a deposit of $400 million and will pay a further $3.6 billion on completion. An additional $1 billion will be deferred and paid in three separate instalments of $100 million in March, April, and May 2021, with the remaining $700 million payable by the end of June 2021.
BP’s divestment of the petrochemical assets comes as part of the company’s strategic plan to reinvent itself, aiming specifically to strengthen its balance sheet as well as enable leadership to focus on the future of its business.
Acknowledging the proposed sell-off plan might come as a surprise, Bernard Looney, BP’s chief executive officer, reiterated divestment of the petrochemical assets comes as part of the company’s ongoing strategic plan of reinventing itself for long-term survival.
"Strategically, the overlap [of these petrochemical assets] with the rest of BP is limited, and it would take considerable capital for us to grow these businesses,” said Looney. “As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. [This] agreement is another deliberate step in building a BP that can compete and succeed through the energy transition."
Alongside further strengthening the operator’s balance sheet with immediate cash, the sale agreement also marks BP’s achievement of its previously announced divestment program to deliver $15 billion of announced transactions by mid-2021 a year ahead of schedule (OGJ Online, Apr. 1, 2020).
For INEOS, already one of the world’s leading petrochemical companies, the proposed purchase aligns with the company’s strategy of extending—as well as expanding and integrating—its current petrochemicals business, according to Jim Ratcliffe, INEOS’ founder and chairman.
“This acquisition is a logical development of our existing petrochemicals business extending our interest in acetyls and adding a world leading aromatics business supporting the global polyester industry,” said Ratcliffe.
Assets overview
The proposed sale—which involves the whole of BP’s total share in its 100%-owned and joint-venture petrochemicals businesses that mainly focus on production of aromatics and acetyls—includes the transfer of BP’s interest in manufacturing assets, technology, licenses, as well as related assets, the operator said.
As part of the purchase agreement, INEOS will acquire BP’s ownership and production interest in the following manufacturing plants:
Americas
- BP’s 100% interest in its Cooper River, SC, plant, which has a purified terephthalic acid (PTA) production capacity of 1.4 million tonnes/year.
- BP’s 100% interest in its Texas City, Tex., plants, which produce 900,000 tpy of paraxylene (PX), 600,000 tpy of acetic acid, and 100,000 tpy of metaxylene.
- BP’s 36.9% interest in Atlas Methanol Co. Unltd.’s plant in Point Lisas, Trinidad & Tobago, including BP’s 700,000-tpy share of methanol production.
Europe
- BP’s 100% interest in BP Chemicals Ltd.’s plant in Hull, UK, which produces 500,000 tpy of acetic acid and 200,000 tpy of acetic anhydride.
- BP’s 100% interest in BP Chembel NV’s plant in Geel, Belgium, which produces 1.4 million tpy of PTA and 700,000 tpy of PX.
Asia Pacific
- BP’s 91.9% interest in BP Zhuhai Chemical Co. Ltd.’s plant in Zhuhai, China, as well as its corresponding interest in the plant’s 2.5-million tpy production of PTA.
- BP’s 51% interest in Yangtze River Acetyls Co. Ltd.’s plant in Chongqing, China, including 200,000-tpy share of acetic acid production and 100,000-tpy share of acetate esters production.
- BP’s 50% interest in BP YPC Acetyls Co. (Nanjing) Ltd.’s plant in Nanjing, China, as well as its corresponding 300,000-tpy share of acetic acid production.
- BP’s 100% interest in PT BP Petrochemicals Indonesia’s plant in Merak, Indonesia, which produces 500,000 tpy of PTA.
- BP’s 70% interest in BP PETRONAS Acetyls Sdn. Bhd.’s plant in Kertih, Malaysia, including its 400,000-tpy share of acetic acid production.
- BP’s 50.9% interest in LOTTE BP Chemical Co. Ltd.’s plant in Ulsan, South Korea, as well as its corresponding 300,000-tpy share of acetic acid and 100,000-tpy share of vinyl acetate monomer.
- BP’s 61.4% interest in China American Petrochemical Co. Ltd.’s plant in Taichung, Taiwan, including its 500,000-tpy share of PTA production.
- BP’s 50% interest in Formosa BP Chemicals Corp.’s plant in Mai Liao, Taiwan, as well as its corresponding 200,000-tpy share of acetic acid production.
The sale also would include BP’s related interests in its BP Infinia chemical recycling technology and Tricoya Ventures UK Ltd., an acetylated wood developer.
The proposed sale, however, does not include BP’s 3.3-million tpy olefins and derivates production capacity at Gelsenkirchen, Germany, or its 200,000-tpy specialty chemicals production at Mülheim, as both assets are highly integrated with the operator’s 265,00-b/d Gelsenkirchen refinery.
INEOS previously has acquired various businesses from BP, most notably its wholly owned Innovene petrochemical and refining subsidiary in 2005, for which INEOS paid $9 billion (OGJ Online, Oct. 7, 2005).
