Total to bulk up in area with plant expansions
French oil major Total said Monday that it will form a joint venture to build major chemical and plastic plant expansions along the Gulf Coast.
Total, headquartered in Paris, will own 50 percent of the partnership that will finance the multibilliondollar expansions of the petrochemical plants in Port Arthur and the Bayport Industrial District, southeast of Houston and near La Porte. The remaining 50 percent will be split between Calgary-based Nova Chemicals Corp. and Borealis, an Austrian petrochemical company based in Vienna.
Total announced the Port Arthur expansion a year ago but wanted to attract investment partners before moving forward. The plan is to build a $1.7 billion ethane processing plant, called a cracker, at Total’s Port Arthur complex. Ethane is a component of natural gas used to make ethylene, the primary building block of most plastic. When complete, the new ethane cracker will produce up to 2.2 billion tons of ethylene a year.
The joint venture also will build a polyethylene plant at Total’s Bayport location to produce 1.35 billion pounds a year of the world’s most common plastic. Total isn’t yet revealing cost estimates on the plastics facility.
“This almost $2 billion 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,” Total CEO Pat-
rick Pouyanné said in a statement.
These projects, like similar ones underway along the Gulf Coast, are designed to capitalize on the cheap and ample natural gas supplies produced from shale rock formations in Texas and other parts of the U.S.
Occidental Petroleum Corp., Exxon Mobil Corp., Chevron Phillips Chemical Co. and Dow Chemical Co. all are completing ethane cracker projects this year along the Texas Gulf Coast, including the Houston area. Exxon Mobil’s and Chevron Phillips’ new ethane crackers, still under construction, are both in Baytown.
As for the Total project, the planned ethane cracker will create a peak of 1,500 construction jobs. The Woodlands-based CB&I is handling the engineering and construction.
Also capitalizing on domestic natural gas supplies, Total last year bought a 23 percent stake for $207 million in the new Houston liquefied natural gas exports company Tellurian, which went public earlier this year.
Tellurian Chairman Charif Souki also founded Houston’s Cheniere Energy.
Tellurian is developing the $12 billion Driftwood LNG project south of Lake Charles, La., as part of the next wave of LNG export projects.