NOVA CHEMICALS
Deal to buy Williams' olefins plant in Louisiana / Canadians gain a foothold on US Gulf
In a deal worth USD 2.1 bn, Nova Chemicals (Calgary, Alberta / Canada; www.novachemicals.com) has announced it will buy the 88.46% stake owned by Williams Partners (Tulsa, Oklahoma / USA; www.williams.com) in the olefins plant at Geismar, Louisiana, gaining its first foothold on the US Gulf Coast. Sabic Petrochemical Holdings US owns the remaining 11.5% stake. The facility with access to a Mississippi River port has capacity to produce 1.95 bn lbs (about 88,450 t) of ethylene annually. The purchase also includes undeveloped land adjacent to the current production site, along with Williams’ interest in the ethylene trading hub in Mont Belvieu, Texas.

Following the sale, expected to close by mid-year, Williams will continue to supply the site with ethane feedstock through its Bayou Ethane pipeline system under a long-term agreement. In shedding the Geismar assets, the Oklahoma group said it wants to concentrate on natural gas fundamentals, reduce its commodity margin exposure and secure its fee-based Gulf Coast transportation business. It will use the proceeds to pay down debt as well as fund capital spending projects.

The acquisition will provide Nova with an operating facility that offers immediate, positive cash flow, access to new customers and the benefits of an experienced workforce, said CEO Todd Karran. The company has promised to offer employment to all employees working at the Geismar plant, as well as sales and marketing employees linked to the business in Williams’ Houston, Texas, office.

A key component of the Canadian chemicals and plastics producer’s growth strategy, Karran said, “is to expand to the US Gulf Coast and leverage next generation technology to better serve our customers in the Americas.” Coupled with recently announced plans for a joint venture with Borealis and Total in Texas, which will benefit from access to cheap shale gas-derived feedstocks – see Plasteurope.com of 29.03.2017 – Karran said the company is taking steps to “firmly establish” its presence in the Gulf region.
21.04.2017 Plasteurope.com [236736-0]
Published on 21.04.2017
German version...German version of this article...
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