VIENNA—French oil company Total S.A., Austria's Borealis A.G. and Canada-based Nova Chemicals Corp. have agreed to form a joint venture in petrochemicals on the U.S. Gulf Coast.
The companies signed definitive agreements under which Total will own 50 percent of the venture and Novealis Holdings L.L.C., a joint venture between Borealis and Nova Chemicals, will own the remaining 50 percent .
The joint venture will include the new $1.7 billion ethane steam cracker—with a capacity of 1 million metric tons a year—which is currently being built alongside Total's Port Arthur, Texas, refinery and Total/BASF's existing steam cracker. The project, which is scheduled to start up in 2020, is expected to create about 1,500 jobs during peak engineering and construction activity.
The project also will include Total's existing polyethylene facility in Bayport, Texas—which has a capacity of 880 million pounds per year—as well as a new a new 625,000 ton per year polyethylene unit using the Borealis Borstar technology at Total's Bayport site.
"This agreement is a key milestone for this integrated petrochemicals project," said Bernard Pinatel, Total's president of refining and chemicals.
Both Borealis CEO Mark Garrett and NOVA Chemicals CEO Todd Karran underscored the importance of the present JV to the growth strategies of both companies, in the U.S. and globally.
"We are convinced of the excellent cost economics of this integrated brownfield investment project, and excited to bring our unique product grades based on our Borstar technology to the North American market," Garrett said.