Sector News

BP to quit SECCO petrochemical JV in China

August 9, 2016
Chemical Value Chain

BP plc is seeking to divest its 50% holding in Shanghai SECCO Petrochemical Co. Ltd. (SECCO), a major petrochemicals joint venture (JV) with China Petroleum and Chemical Corp. (Sinopec) based at Caojing, China, according to Reuters, which cites people familiar with the matter.

BP has reportedly hired an investment bank to assist with the sale, which could raise $2–3 billion. SECCO is one of China’s largest petrochemical operations and includes a 1.3–million metric tons per year (MMt/y) naphtha cracker and many downstream units. BP tells CW that the company is “making no comment on this speculation.”

The move would represent the latest chapter in the narrowing of BP’s chemicals portfolio. In 2005, the company sold most of its petrochemical operations to Ineos Group Ltd. following a strategy review. BP retained only three differentiated main segments—purified terephthalic acid (PTA), para-xylene, and acetic acid—as well as a few other assets, including the stake in SECCO and two ethylene plants at Gelsenkirchen, Germany, with a combined capacity of 1 MMt/y. These plants formed part of the Ruhr Oel refinery JV with Rosneft (Moscow, Russia). The Gelsenkirchen assets have since been transferred to BP under a swap deal with Rosneft.

In addition to SECCO, BP has major PTA and acetic acid manufacturing assets in China. It commissioned last year the third phase of a PTA complex at its BP Zhuhai Chemical Co. Ltd. affiliate at Zhuhai. The plant, with a capacity of 1.3 MMt/y, increased the site’s overall PTA capacity to 2.7 MMt/y.

BP, in its second-quarter financial results, says that it plans to offload $3–5 billion worth of assets this year, of which $1.9 billion have been agreed on. BP recently agreed to sell its aromatics complex at Decatur, Alabama, to Indorama Ventures Ltd. (Bangkok, Thailand). BP says the divestment is in line with its worldwide petrochemical strategy that focuses on world-scale, low-cost facilities that use BP proprietary technology, including the production of PTA.

Analysts say BP is also likely to sell the petrochemical assets in Germany, which include a solvents production subsidiary, DHC Solvent Chemie GmbH.

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

May 15, 2022

New York’s EPR and packaging reduction bills lauded as game-changers in plastic pollution battle

Chemical Value Chain

The US State of New York is introducing two new bills to combat over-packaging, poor recycling rates and litter issues, including an Extended Producer Responsibility (EPR) program requiring companies such as McDonald’s and Amazon to pay for the cost of packaging disposal and recycling.

May 15, 2022

Borealis and Reclay launch entity focused on lightweight packaging 

Chemical Value Chain

The new organization’s mission is to redesign the critical steps of the plastics sorting and recycling system for post-consumer lightweight packaging (LWP) to speed up circularity, born from a need to meet the rising market demand for high-quality recyclates for use in high-end plastic applications.

May 15, 2022

Starbucks and Hubbub launch reusable packaging fund as COVID-19 diminishes consumer appetite

Chemical Value Chain

Starbucks and Hubbub have launched a £1 million (US$1.22 million) “Bring It Back Fund” to increase the uptake of reusable packaging in the F&B industry. The funding will go toward innovative ideas that make it easier for customers to use alternatives to single-use packaging by supporting pilot projects that help shift consumption habits.