News Post
Motiva to buy Flint Hills Port Arthur, Texas chemical plant
Motiva Enterprises has signed an agreement to buy the Flint Hills Resources chemical plant adjacent to its Port Arthur, Texas, oil refinery, kicking off a push into petrochemicals.
Motiva, the U.S. refining arm of Saudi Aramco, plans to operate the chemical plant while it builds three giant petrochemical units within its Port Arthur complex as part of an $18 billion expansion of operations along the U.S. Gulf Coast, said three sources familiar with the agreement.
Motiva and Flint Hills confirmed the pending deal after Reuters disclosed it had agreed to buy the operation. Motiva said it expects to deal to close by late 2019.
A Flint Hills spokesman did not reply to requests for comment.
The purchase price was not disclosed. Flint Hills acquired the plant from Huntsman Corp in 2007 for $770 million.
The Flint Hills plant operates a 1.57 billion-pound-per-year ethylene cracker, a unit producing nylon component cyclohexane, and a network of pipelines and storage caverns, the sources said. Ethylene is a building block for plastics.
Motiva has been investing heavily in the Port Arthur area since becoming the sole owner of the 607,000 bpd refinery, after the 2017 break-up of a partnership with Royal Dutch Shell Plc that created Motiva.
In April, Houston-based Motiva announced it would refurbish two empty, historic buildings in downtown Port Arthur for use as offices. It also has filed documents with the state to build a $5 billion steam cracker that would produce ethylene.
The sources said the Flint Hills chemical plant buys petrochemical feedstock from Motiva’s refinery, the largest in the United States.
The acquisition comes as the market for chemicals is growing faster than for gasoline and other refined products.
Motiva has considered acquiring oil refineries or taking over existing plants, but no deals were struck. In February, it ended talks with the government of Curacao over a request to operate its 335,000 barrel-per-day Isla refinery and storage terminal.
Before the split with Shell in 2017, Motiva weighed buying Lyondell Basell Industries’ 263,776-bpd Houston refinery to replace plants it was turning over to Shell.
A 2018 plan to expand Port Arthur’s oil refining operations to make it the largest plant by capacity in the world was shelved over worries of too much processing at one U.S. Gulf Coast site vulnerable to severe storms, like 2017’s Hurricane Harvey.
A final investment decision on the petrochemical units is expected to be made between the end of 2019 and the spring of 2020, the sources said.
Source: Reuters
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