Sinopec to buy BP’s interest in SECCO for $1.68 billion

Gaoqiao Petrochemical Co. Ltd., a Shanghai-based, wholly owned subsidiary of China Petroleum & Chemical Corp. (Sinopec), has agreed to acquire BP PLC’s 50% stake in SECCO Petrochemical Co. Ltd. (SECCO) for $1.68 billion.

SECCO is currently owned by BP with 50% interest, Sinopec 30%, and Sinopec Shanghai Petrochemical Co. Ltd. 20%, in which Sinopec holds a majority interest. Based in Shanghai, SECCO is a major producer of olefins along with polymers and other derivatives including polyethylene, polypropylene, acrylonitrile styrene, polystyrene, butadiene, and other products.

SECCO’s primary production plants include a 1.09 million-tonne/year ethylene plant, a 1.09 million-tpy ethylene cracking plant, a 600,000-tpy aromatics extraction plant, a 600,000-tpy polyethylene plant, and a 250,000-tpy polypropylene plant.

Gaoqiao Petrochemical operates 75 plants that produce gasoline, jet fuel, diesel fuel, base stock for lube oil, paraffin wax, synthetic rubber, commodity organic chemicals, synthetic plastics, and fine chemicals. The company’s current nameplate capacity includes a 1.13 million-tpy refinery and 600,000 tpy of petrochemical products output.

BP has had a petrochemicals business in China since the 1970s, first through technology licensing and then through manufacturing joint ventures. In addition to SECCO, BP has three other petrochemical manufacturing combines in China: purified terephthalic acid (PTA) production in Zhuhai; and acetic acid and other acetyls production with Yangtze River Acetyls Co. in Chongqing and BP YPC Acetyls Co. in Nanjing. In March 2015, BP began production from Zhuhai Unit 3, the world’s largest single-train PTA unit.

The deal is expected to close before yearend with the consideration payable in instalments.