Venture of Total, OMV-owned Borealis to start Texas cracker in Q1 2021, PE line in Q1 2022

Baystar, a Total and Borealis venture, will start by the end of March its new Port Arthur ethane cracker with over a million-tonnes-per-year capacity while the new 625,000-tonne per year polyethylene unit in Pasadena will start by March 2022, a spokeswoman said by email on Jan. 25.

Bayport Polymers Baystar View 2017. Image courtesy of Borealis Group.

Once completed, the Port Arthur cracker will supply feedstock for the existing 400,000 tonne-per-year polyethylene capacity at the Bayport plant in Pasadena, about 80 miles to the west.

When the venture completes construction of the new polyethylene capacity in early 2022, it will also get ethylene from the Port Arthur’s new cracker. The combined polyethylene capacity for this project initially projected to start in 2021 will be over a million tonnes/year.

As the project progressed in past months, the Borealis ownership changed. It is now majority owned by Austria-based OMV.

As for Total, so far in 2021 it has been very active buying and planning investment in renewable energy near its Gulf Coast chemical assets with the intention to supply them green electricity.

Equity changes during construction

Total has owned half of the project since the start. For the other half there have been two changes.

The Baystar joint venture initially included Nova Chemicals. Nova had an equal venture with Borealis for half of the project named Novealis. In January 2020 Borealis bough the full Novealis participation. Borealis and Nova were at the time owned by Mubadala, based in Abu Dhabi.

Mubadala is a $232-billion based organization with interests in more than 50 businesses in over 50 countries, according to its website. It has owned Nova since 2009. Nova assets include polyethylene facilities in Ontario, Canada.

OMV, a company listed in Austria with three refineries as well 2,100 fuel stations in Europe, said on Oct. 29 it bought a 39% stake in Borealis from Mubadala to increase its shareholdings in Borealis to 75%. The acquisition of that majority stake had a cost of $4.7 billion. Mubadala retained a 25% stake in Borealis.

Borealis operates in over 120 countries. It has two joint ventures. One of them, known as Borouge, is with the Abu Dhabi National Oil Company and based in the United Arab Emirates. The second is Baystar, with Total.

Borealis said on Feb. 4 it started a process to divest its nitrogen business units that includes fertilizers. The plan is to focus on polyolefins and base chemicals. Nova also sold styrene assets in 2020 to increase its focus on polyethylene.

Borealis announced on Feb. 5 that Thomas Gangl, executive board member of OMV, will become CEO of Borealis starting on April 1, and succeed Alfred Stern. The change reflects the new ownership, it said.

Total’s renewable energy purchases

Paris-based Total said in mid-January it won’t renew its membership in the American Petroleum Institute (API), which has more than 600 members including several involved in petrochemicals manufacturing such as Chevron, Dow Chemical, Exxon Mobil, and Shell.

“As part of our Climate Ambition made public in May 2020, we are committed to ensuring, in a transparent manner, that the industry associations of which we are a member adopt positions and messages that are aligned with those of the group in the fight against climate change", said Patrick Pouyanne, Chairman and CEO of Total.

In addition, Total, with over 100,000 employees in more than 130 countries, has been very active so far in 2021 with acquisitions in the U.S. of renewable energy assets, particularly in Texas.

The company announced on Feb. 6 the purchase from SunChase Power of a project portfolio of 2.2 GW of solar projects, and 600 MW of battery storage assets, all in east Texas. All projects will be developed and come online between 2023 and 2024, it said.

“With this latest acquisition, Total is now developing close to 4 GW of renewable power capacity in the U.S., thus contributing to our objective to reach close to 35 GW of renewable generation capacity by 2025,” Pouyanne said.

Total had announced on Jan. 14 an agreement to develop 1.6 GW in solar and energy storage projects in the U.S. in partnership with an affiliate of South Korea’s Hanwha Group.

Green electricity for U.S. chemical sites

“Supplying green electricity to all our industrial activities in the United States is concrete proof of our ambition to achieve carbon neutrality by 2050," Pouyanne said.

Total will commit to a 1 GW corporate PPA (power purchase agreement) sourced from its solar power and energy storage portfolio “to cover all the electricity consumption of its operated industrial sites in the U.S., among which Port Arthur refining and petrochemicals platform and La Porte and Carville petrochemical sites,” it said.

Total Petrochemicals & Refining USA operates the world’s largest styrene and polystyrene facility in Carville, Louisiana, according to the company’s website. Total fully owns the polystyrene unit while the styrene plant is a joint venture with Saudi Basic Industries Corp. (SABIC).

Total also operates one of the world’s biggest polypropylene plants. It is located in La Porte, Texas, and has over a million tonnes of annual capacity.

At Port Arthur, located in Texas near the border with Louisiana, Total owns a 185,000 barrels-per-day refinery. On the chemicals side it owns a one million tonne/year cracker in a joint venture with Germany-based BASF, according to its website.

The new cracker in Port Arthur that will be started up in the first quarter of 2021, according to the Baystar spokeswoman, had an initial estimated investment cost of $1.7 billion and was originally scheduled start in late 2020, according to information on Total’s website.

According to Total’s website, the investment in the new Port Arthur cracker as well as the new polyethylene capacity in Pasadena coming online in early 2022 fulfill an ambition “to be fully integrated across the ethylene supply chain and one of the top players in the U.S. polyethylene market.”

By Renzo Pipoli