INEOS Phenol and Sinopec Yangzi Petrochemical Company have signed a Memorandum of Understanding (MOU), agreeing the framework for the design and future operation of a phenol/acetone joint venture at the Nanjing Chemical Industrial park in Jiangsu Province, China.

The agreement is an important step as the two companies begin detailed discussions on the formation of the Joint Venture in Nanjing. The Memorandum was preceded by a Letter of Intent signed in December 2009 and follows a detailed evaluation of the investment.

The partnership will benefit from Sinopec's local feedstock advantages and INEOS' proprietary phenol technology.

The annual capacity of the new facility will be 400,000 tonnes of phenol and 250,000 tonnes of acetone making it the largest plant of its kind in China. The facility will also include 550,000 tonnes/year of cumene capacity. The location of the plant in Nanjing places it at the centre of China's strongest market for both phenol and acetone. It is currently expected that the project will be completed by the end of 2013.

Tony Traynor, CEO of INEOS Phenol states, "Signing the MOU is an essential step as we work towards establishing a Joint Venture and marks a major milestone in our relationship with Sinopec YPC. This joint venture will allow INEOS to bring its proprietary phenol technology to China and teaming with a strong, local partner like Sinopec YPC will bring considerable value to our business and our customers."

INEOS Phenol is the world's leading manufacturer of phenol and acetone with sites in Germany, Belgium, and USA (Alabama). China is the world's fastest growing market for phenol and acetone and Sinopec is China's leading producer of phenol and acetone with three production sites in Shanghai, Beijing, and Tianjin.