Total S.A. (Paris, France; www.total.com) is entering a partnership with Borealis AG (Vienna, Austria; www.borealisgroup.com) and Nova Chemicals Corp. (Calgary, Alta.; www.novachem.com) to form a joint venture (JV) with the aim of building an ethane steam cracker and a new Borstar polyethylene (PE) unit on the U.S. Gulf Coast. Total is expected to hold a 50% interest in the new JV.
More precisely, the joint venture will include:
- building a new ethane steam cracker in Port Arthur, Texas with a capacity of 1 million metric tons per year (m.t./yr);
- Total’s existing 400,000-m.t./yr PE plant in Bayport, Tex;
- building a new 625,000-m.t./yr Borstar polyethylene plant on the Bayport site
The JV is expected to be established in late 2017, and the final investment decision on the Borstar polyethylene plant will be taken simultaneously.
The new $1.7-billion cracker is scheduled to start up in 2020 and will create around 1,500 jobs during peak engineering and construction activity. The engineering, procurement and construction contract (EPC) of the ethane steam cracker has been awarded by Total to CB&I (The Woodlands, Tex.; www.cbi.com).
The new cracker will be built alongside Total’s Port Arthur refinery and Total/BASF existing steam cracker. By leveraging synergies with its existing integrated platform in Texas, Total optimized capital expenditure and will deliver one of the most competitive cracker projects in the US.
“After significant investments in US LNG and US shale gas in 2016, this almost two billion dollar investment signals our determination to strengthen our presence in the United States, where we have operated for 60 years and have more than 6,000 employees” explained Patrick Pouyanné, Chairman and CEO of Total. “We want to take advantage of the business-friendly environment to contribute to making American petrochemicals even greater. By joining forces with Borealis and Nova, we aim to create a major player in the US polyethylene market”.
“This opportunity will complement Nova Chemicals’ existing asset structure in Canada and broaden our PE product slate as we continue to grow our business in the Americas to deliver products that make everyday life healthier, safer and easier,” stated Todd Karran, President and CEO, Nova Chemicals. “It also paves the way for Nova Chemicals to collaborate further with Borealis as part of the IPIC family of companies,” continued Karran.
“Working in a JV with Nova Chemicals and Total on a cost effective brownfield investment project, integrated with a cracker is an attractive opportunity. We can also leverage our proven technology and benefit from large scale experience gained in other projects (e.g., Borouge) and develop the project together with Nova Chemicals,” said Borealis CEO Mark Garrett.