25 Nov - Ineos to buy Sasol stake in Gemini HDPE project for USD404 million
Ineos has agreed principle terms with Sasol (Johannesburg) for the USD404-million acquisition of the South African company’s 50% ownership stake in their Gemini high-density polyethylene (HDPE) manufacturing joint venture at La Porte, Texas, according to Chemweek.
The target closing date for the acquisition is 31 December, the companies say.
Ineos Olefins and Polymers (O&P) USA, a wholly owned subsidiary of Ineos, will become the sole owner of the 470,000-metric tons/year HDPE unit. The company has been the operator of the Gemini plant located within Ineos’ Battleground manufacturing complex since its startup in 2017. The proposed purchase from Sasol subsidiary Sasol Chemicals North America will allow it to “further expand its reach” in the rapidly growing specialty PE markets for pressure pipe and high molecular weight film, it says. It will also “increase Ineos Group’s global HDPE market share and strengthen its ability to service the rapidly growing bimodal markets,” it adds. The transaction is subject to financing and other customary adjustments.
“We are excited about the opportunity to acquire Sasol’s half of Gemini. This world-class asset is positioned to serve the growing global bimodal markets and would allow our business to meet increased demand from our customers,” says Ineos O&O CEO Michael Nagle. Ineos has four other production plants with 767,000 metric tons/year of total HDPE capacity at Deer Park, Texas.
Sasol president and CEO Fleetwood Grobler says the divestment “continues the transformation of Sasol’s chemicals business toward specialty chemicals markets.” Proceeds from the transaction will be used to repay near-term debt obligations, the company says. The value of the net assets relevant to the sale was USD176 million as at 30 June 2020, which is net of debt facilities, as disclosed in Sasol’s financial statements, it says. The loss attributable to the net assets was USD18 million for the financial year ended 30 June, with the proposed sale to only be effective upon restructuring of the existing debt facilities, it adds.
In October, 2020, as MRC reported before, Sasol agreed to form an equal JV with LyondellBasell, with LyondellBasell to pay USD2 billion to acquire 50% of Sasol’s new 1.5-million metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) plants at Lake Charles, Louisiana. That transaction is also expected to close by the end of the year.
According to MRC's ScanPlast report, September estimated HDPE consumption in Russia fell to 55,790 tonnes from 119,750 tonnes a month earlier. ZapSibNeftekhim increased its export polyethylene (PE) sales. Kazanorgsintez's production capacities were also shut for a turnaround. Overall HDPE shipments to the Russian market totalled 911,650 tonnes in the first nine months of 2020, up by 6% year on year. Production grew significantly, whereas imports slumped by 27%.
Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.