Total, Borealis and NOVA Chemicals form joint venture in petrochemicals

Total, Borealis and NOVA Chemicals Corporation announced that affiliates of the three companies have signed definitive agreements to form a joint venture in petrochemicals on the U.S. Gulf Coast. The announcement was made Monday, Feb. 19.

The joint venture – in which Total will own 50 percent and Novealis Holdings LLC, a joint venture (JV) between Borealis and NOVA Chemicals, will own the remaining 50 percent – will commence subject to customary closing conditions, including receipt of regulatory approvals, according to a release by the companies.

“This agreement is a key milestone for this integrated petrochemicals project. This joint venture is aligned with Total’s strategy to strengthen our position by taking advantage of low-cost U.S. gas,” said Bernard Pinatel, president of the Refining and Chemicals Division at Total. “We look forward to working with Borealis and NOVA Chemicals to create world-class facilities and become a major player in the growing U.S. and global market for polyethylene.”

The joint venture will include:

• An ethane steam cracker, which is currently under construction, at the Total Port Arthur Refinery

• Total’s existing polyethylene facility in Bayport

• A new Borstar polyethylene unit at Total’s Bayport, following a decision on the outcome of an acceptable EPC contract.

As announced in March 2017, the new $1.7 billion ethane steam cracker is being built alongside Total’s Port Arthur refinery and Total/BASF existing steam cracker, said Bryan Canfield, GM of the Total Port Arthur refinery.

“This is an exciting time for Total in Port Arthur,” Canfield told the Business Journal. “Now is the right time for us to invest in the Gulf Coast as it is aligned with our growth strategy. The ethane cracker will be built right next to our refinery as well as the existing steam cracker Total co-owns with BASF, allowing us to capture significant synergies on products and utilities with both. It’s a great opportunity for the region as this is a project that will require up to 1,500 workers during the peak construction activity and will create dozens of new full-time jobs once the plant is in operation, as well as all the associated business that comes with a new industrial facility.”

A “cracker” is industry lingo for a petrochemical plant that takes oil and natural gas and breaks them into smaller molecules that form the building blocks of many products people use every day. It is called an ethane cracker because 100 percent of the feedstock is ethane, which provides a high-yield of ethylene.

Ethane crackers complete a series of processes to convert ethane into ethylene and other compounds used in making plastic, Canfield said. Ethane is heated to 1,560 degrees Fahrenheit, which begins numerous chemical reactions. This process is followed by immediate cooling to stop these reactions. Then by compressing and distilling the mixture, ethylene is isolated and can be used by chemical manufacturers in the production of plastics and other every day products.

The main use of ethylene is in the production of polyethylene, the world’s most widely used plastic.

One example of an end product that starts with the steam cracker is the plastic wrap used to preserve meat, Canfield said.

The project is scheduled to start up in 2020, according to the release.

“The JV with Total and NOVA Chemicals is a key project in advancing Borealis’ global growth, said Borealis CEO Mark Garrett.

“Not only are we convinced of the excellent cost-economics of this integrated brownfield investment project, but we are also excited to bring our unique product grades based on our Borstar technology to the North American market,” Garrett said.

Partnering with Total and Borealis will allow NOVA Chemicals to better serve customers throughout the Americas by delivering a broader slate of products that help make everyday life healthier, easier and safer, said NOVA Chemicals CEO Todd Karran.

“A key component of NOVA Chemicals’ growth strategy is to expand beyond our traditionally Canadian footprint by extending our presence in the U.S. Gulf Coast,” Karran said.