27 March 2003 21:14 [Source: ICIS news]
HOUSTON (CNI)--Sunoco announced Thursday it will pay $190m (Euro179m) for a 15-year contract with Equistar for 318 000 tonne/year of propylene and acquisition of Equistar's 180 000 tonne/year polypropylene (PP) plant at Pasadena, Texas.
Philadelphia, Pennsylvania-based Sunoco said it has signed a definitive agreement to form a limited partnership with Equistar involving Equistar's ethylene plant at La Porte, Texas, which will produce some 227 000 tonne/year of propylene to meet 70% of the annual 318 000 tonne propylene commitment.
The remaining 90 000 tonne/year of propylene will be provided as part of a long-term contract.
Equistar will continue to operate and manage the La Porte facility for the limited partnership. Sunoco will take over operation of the Bayport PP plant.
Sunoco chairman and chief executive John Drosdick said of the deal: "Through the partnership with Equistar, we have secured a favourable long-term supply of propylene for our Gulf Coast PP business. We have also added to our PP position with the acquisition of the Bayport plant. Securing supply through backward integration and increasing our PP capacity will strengthen our market position in this business."
Sunoco operates a 363 000 tonne/year PP plant at La Porte and also has PP plants at Neal, West Virginia and at Marcus Hook, Pennsylvania. It's global PP capacity is 1.13m tonne/year.
Equistar is the Houston-based joint venture between Lyondell Chemical and Millennium Chemicals.
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