Total partners with Borealis and Nova in $1.7B ethane cracker project
Total announced Monday, March 27, that the company is entering into a partnership with Borealis and Nova to form a joint venture with the aim of building an ethane steam cracker at Total’s plant in Port Arthur and a new Borstar polyethylene unit in Bayport.
The joint venture is expected to be established in late 2017, according to a release by Total, and the final investment decision on the Borstar polyethylene plant will be made simultaneously.
“We really feel there’s an advantage in leveraging the strengths from three different partners,” Total General Manager Bryan Canfield told The Business Journal, “Nova, Borealis and Total. A 50 percent share of a world-scale cracker like this is a good fit for us and the integrated model that we have. We don’t want to have a lot of excess or short falls in the value chain.”
More precisely, the joint venture will include:
• Building a new ethane steam cracker in Port Arthur
• Total’s existing polyethylene 400 kt/y plant in Bayport
• Building a new 625 kt/y Borstar polyethylene plant on the Total Bayport site
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, Canfield said. Total awarded the engineering, procurement and construction contract (EPC) for the ethane steam cracker to CB&I.
The new cracker will be built alongside Total’s Port Arthur refinery and Total/BASF existing steam cracker, a $1.5 billion investment by BASF Corporation and Total Petrochemicals & Refining USA Inc.
“It’s really exciting news for the region,” Canfield said. “It’s a project that’s been in discussion for three to four years. We’ve always felt like the ethane cracker on this site would have a lot of advantages that were unique. We have existing synergies with our refinery that we run every day and our joint venture that we have with BASF on our cracker. Just by capturing those synergies, it gave us the opportunity to make this much more financially attractive for the Total group.”
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 F (850°C), 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.
“When you go into a grocery store and you buy meat from the freezer section, you’ve got this plastic that’s wrapped around it to keep it fresh. You tear through it in seconds, but that right there gives it a shelf life. If it’s wrapped in paper or something else, it doesn’t have that same kind of freshness — you get more spoilage and waste.”
That’s just one example. There are many other applications for the polyethylene produced at Total, including plastic containers of all sorts, Canfield said.
Besides benefiting the consumer with the production of plastic products, the steam cracker will also create economic growth for the region, said Golden Triangle Business Roundtable Executive Director Dennis Isaacs.
“This project from Total is going to create the potential for new jobs relevant to the construction and maintenance work forces,” Isaacs said. “That doesn’t include the folks that will be hired full-time to support the sustainable operations. These are the kind of things that we are seeing in our area that are not only going to help the economic development and the growth and prosperity of Southeast Texas, but will also create the opportunity to empower the workforces necessary to meet the demands of that growth.”
Isaacs said projects like Total’s new steam cracker also support entities that complement the industrial market.
“This is supporting … all the affiliated industries that help the preparation of the workforce,” Isaacs said, naming entities such as Workforce Solutions Southeast Texas, which helps develop the workforce to operate facilities such as Total’s, the Associated Builders and Contractors of Southeast Texas, which helps train people how to be welders, insulators and carpenters and Industrial Safety Training Council, which provides the safety training workers need to do jobs inside the plant.
“It’s all integrated into one large picture for the overall economic development and growth of Southeast Texas,” Isaacs said, “and we appreciate the Total folks for their vision of the future in Southeast Texas and for selecting this part of Texas to implement this growth.”
Rendering courtesy of Total