BP Amoco getting $100m for Wilton share

01 June 1999 19:25  [Source: ICIS news]

HOUSTON (CNI)--Huntsman ICI Holdings (HICI) will pay more than $100m (Euro95m) for BP Amoco's 20% share of the Wilton, Teesside cracker and gain full control by purchase of the rest from ICI for an undisclosed sum, CNI learned Tuesday.

Huntsman and ICI formed HICI in April to acquire ICI's polyurethanes, titanium dioxide, petrochemical and aromatics businesses with Huntsman owning 70% and ICI the remaining 30%. But they excluded the Wilton olefins cracker from that deal.

Although Huntsman and ICI both declined to comment on price for acquisition of the Wilton facility, a representative at Huntsman told CNI the 100% acquisition will occur as a separate transaction from the rest of the Huntsman-ICI deal. And market sources told CNI the BP Amoco portion would cost more than $100m.

The cracker package also includes the related butadiene production and gas treatment units, according to ICI.

With an annual capacity of 865 000 tonne of ethylene and 400 000 tonne of propylene, the cracker gives HICI "total control" of what Huntsman calls "one of the world's largest and most versatile olefins production facilities."

Peter Huntsman, president and chief operating officer of Salt Lake City, Utah-based Huntsman, called the deal "a major breakthrough for Huntsman ICI in increasing our ethylene and propylene position in Europe and in laying a stronger foundation for the building of our intermediate and specialty chemicals businesses."

BP Amoco told CNI's London office that BP Amoco feels it will receive full value for its share of the plant in the deal expected to close by the end of June. BP Amoco said it decided to exit the cracker because its olefins strategy has changed following its Grangemouth, Scotland investments and the addition of assets from Amoco. Previously BP had said it wanted to up its equity stake to about 50% and operate the Teesside cracker.

The purchase includes a long-term agreement for BP Amoco to continue as a major customer of ethylene and by-products from the cracker. But executives declined to elaborate on further elements of that part of the deal.

Huntsman said: "We are pleased to be entering into this close working relationship with BP Amoco. We trust that it will be the first of many agreements that we and BP Amoco will enjoy."

(Additional reporting by Anna Williams in London.)

By: Gary Taylor
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