France’s Total plots US$1.7B joint venture with Calgary’s Nova Chemicals and Austria’s Borealis

French energy company Total is launching a multibillion-dollar petrochemical joint venture in Texas as it announced a US$1.7 billion joint venture on Monday with Nova Chemical of Calgary and Austria’s Borealis AG.

The plan announced Monday in Paris is the company’s largest-yet investment in petrochemicals, and part of its strategy to benefit from cheap shale gas in the U.S. and to profit from the “business-friendly environment” under the current U.S. administration under President Donald Trump, who has signalled his support for the energy industry.

Total will partner with chemical companies Borealis and Nova to build two new units on the U.S. Gulf Coast.

One is an ethane steam cracker in Port Arthur, Texas, that would convert natural gas into chemicals used for plastics and other materials. Total would provide the initial US$1.7 billion for that operation. The other is a new polyethylene plant in Bayport, Texas, also for making plastics. The cost of that plant is still being worked out among Total, Borealis and Nova, said Bernard Pinatel, president of Total’s refining and chemicals. Overall, he said, the project would be worth several billion dollars and Total would hold 50 per cent of it.

Todd Karran, president and CEO of Nova Chemicals, said in a press release the joint-venture “paves the way for Nova Chemicals to collaborate further with Borealis as part of the (International Petroleum Investment Company) family of companies.” He said the joint-venture would also complement the company’s chemical assets in Canada. Calgary-based Nova is a subsidiary of Abu Dhabi’s IPIC, which also owns 64 per cent of Vienna-based Borealis.

The company did not disclose the amount it is contributing to the venture. Total says the venture, which depends on regulators’ approval, would start in 2020 and create at least 1,500 local jobs.

“We want to take advantage of the business-friendly environment” to boost Total’s 60-year presence in the U.S., CEO Patrick Pouyanne said in a statement.

Pinatel said the French company is encouraged by a U.S. administration “favourable to everything that touches the energy sector.”