By Andres Gonzalez
LONDON (Reuters) – Spanish company Cepsa is considering the sale of a chemical plant in Shanghai as the oil and gas company pivots to a greener strategy across its various business lines, according to three sources familiar with the situation.
A sale would see Cepsa’s exit from China and comes after the company abandoned a plan to sell its entire chemical business due to disappointing offers, according to sources close to the negotiations.
A spokesperson for Cepsa declined to comment.
Cepsa, owned by Abu Dhabi state investor Mubadala and private equity Carlyle, has unveiled an up to 8-billion euro ($8.8 billion) investment plan that will see the company generate the majority of its core earnings from sustainable businesses by 2030.
To accelerate and finance the strategy, the company has sold fossil fuel assets, including the March divestment of offshore fields in the United Arab Emirates to French oil company TotalEnergies.
Cepsa owns 75% of the chemical plant situated in Shanghai, which produces phenol, acetone and cumene, with the remaining 25% in the hands of Sumitomo Corporation.
Cepsa is working with advisors on a sale, the sources said.
The plant was inaugurated in 2015 by the Spanish Industry Minister at the time, Jose Manuel Soria. Cepsa said it invested 300 million euros in the facility between 2012 and 2014.
Phenol, acetone and cumene are utilised in the manufacturing of consumer plastic products and paint and coating solvents.
More recently, Cepsa announced a joint venture with vegetable oil processor Apical Group’s Bio-Oils unit to build a biofuels plant in southern Spain and the creation of “Andalusian Green Hydrogen Valley”, a project to generate green hydrogen in Spain.
As part of its strategy, Cepsa aims to build a portfolio of 7,000 megawatts (MW) of renewable assets by 2030.
As of March, Cepsa surpassed 2,000 MW of solar projects under development (2.1 GW) to supply its network of EV service stations, and to supply the energy needed at its industrial centers, including for the production green hydrogen and second-generation biofuels.
($1 = 0.9136 euros)
(This story has been corrected to change the figures to 7,000 MW from 7.000 MW in paragraph 11 and from 2.000 MW to 2,000 MW in paragraph 12)
(Reporting by Andres Gonzalez, Editing by Chizu Nomiyama)
