INTERACTIVE: Total, Borealis and NOVA plan US Gulf Coast cracker

28 March 2017 09:58 Source:ICIS Chemical Business

Total, Borealis and NOVA Chemicals plan to form a joint venture to build a $1.7bn world-scale ethane cracker and polyethylene (PE) unit on the US Gulf coast, the companies announced on 27 March.

The plan includes building a new 1m tonne/year cracker in Port Arthur, Texas; use of Total’s existing 400,000 tonne/year PE plant in Bayport, Texas; and building a new 625,000 tonne/year PE plant at the Bayport site, the companies announced in a news release.

The joint venture would be established in late 2017, with a final investment decision (FID) on the new PE plant to be taken up simultaneously. The engineering, procurement and construction contract has been awarded to CB&I, with start up for the cracker scheduled for 2020.

“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 US, where we have operated for 60 years and have more than 6,000 employees,” said Total CEO Patrick Pouyanne.

“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.”

NOVA Chemicals CEO Todd Karran said the joint venture will complement the company’s existing assets in Canada and broaden its PE product slate. “Working in a JV with NOVA Chemicals and Total on a cost-effective brownfield investment project, integrated with a cracker is an attractive opportunity,” said Borealis CEO Mark Garrett.

“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,” he added.

NOVA SEES SYNERGIES

NOVA Chemicals sees strategic synergies in the planned joint venture cracker between Total, NOVA and Borealis, a senior executive said on 27 March. “This is a great opportunity for us to work with one of our sister companies – it is the first use of Borstar technology to produce PE in North America,” said Naushad Jamani, senior vice president, Olefins & Feedstock at NOVA.

Jamani spoke to ICIS on the sidelines of the International Petrochemical Conference (IPC) on the day of the announcement.

“This mixes well with our suite of products as customers increasingly look at complex structures that require different types of resins,” he added.

The Borstar technology comes from Borealis, which is 64% owned by Abu Dhabi’s International Petroleum Investment Company (IPIC), which also owns NOVA Chemicals.

All the ethylene produced in the cracker will go to the PE plants in the joint venture, said Jamani. The grade or grades of PE at the new Borstar unit were not specified.

In terms of marketing the new Borstar PE, it is “early days”, noted Jamani. “Clearly NOVA is the biggest player in the marketplace [among the partners] so will play a key role,” he said.

NOVA EXPLORES LLDPE

Meanwhile, NOVA is still exploring a new 450,000 tonne/year Advanced Sclairtech linear low density PE (LLDPE) project in Sarnia, Canada, Jamani said.

The company expects to make a final investment decision (FID) by the end of the year.

“We are finishing up the front end engineering and hoping to go to the board by mid-year. All is looking good,” said Jamani.

A final investment decision could come as early as mid-year, he noted.

It would be the second Advanced Sclairtech LLDPE plant for NOVA. Its first plant is in Joffre, Alberta, Canada.

“It makes sense to have this in Sarnia (east Canada) to provide security of supply to customers. There is some risk mitigation having it in another location,” said Jamani. The project is targeted for start-up in 2022, he confirmed, and would be fed by an expansion of its Corunna, Canada cracker by 50% by that timeframe.

The current ethylene capacity of the Corunna cracker is around 1.8bn lb/year (816,000 tonnes/year).

“We are actively pursuing growth,” he said.

Earlier at the conference, Jamani said that NOVA wanted to triple its size in the next 15-20 years. NOVA could not achieve such a fast expansion rate by relying solely on organic growth, he said.

“We remain fundamentally bullish on PE. Demand is growing and there are very few new projects elsewhere in the world,” said Jamani.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC took place from 26-28 March in San Antonio, Texas.

Additional reporting by Jeremy Pafford

KEY FACTS

- $1.7bn cracker to be located in Port Arthur, Texas

- Includes new 1m tonne/year cracker; use of Total’s existing 400,000 tonne/year PE plant in Bayport, Texas; and a new 625,000 tonne/year PE plant at Bayport

- JV to be established in late 2017, final investment decision on new PE plant by the end of the year.

- Cracker start-up scheduled by late 2020

- First use of Borstar technology to produce PE in North America

INTERACTIVE MAP:  https://public.tableau.com/profile/joseph.chang#!/vizhome/shared/5FX6BGW9T

By Niall Swan, Joseph Chang and Al Greenwood