Total to invest $1.7bn in Texas petchem expansion

Total is entering a partnership with Borealis and Nova to form a joint venture with the aim of building an ethane steam cracker and a new Borstar polyethylene unit on the US Gulf Coast. Total is expected to hold a 50 per cent interest in the new joint venture. The joint venture will include: building a new 1 million tonnes per year (mtpy) ethane steam cracker in Port Arthur, Texas; Total’s existing polyethylene 400,000 tpy plant in Bayport, Texas; building a new 625,000 tpy Borstar polyethylene plant on the Bayport site, Texas. The joint venture is expected to be established in late 2017 and the final investment decision on the Borstar polyethylene plant will be taken simultaneously. The $1.7 billion new 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 new cracker will be built alongside Total’s Port Arthur refinery and Total/BASF existing steam cracker. By leveraging synergies with its existing world-class 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”. The abundance of available gas in the US as result of the shale revolution provides two competitive advantages for petrochemicals: access to low-cost energy to run the facilities and competitively priced ethane feedstock,