MOSCOW (MRC) -- Total Petrochemicals is exploring construction of a USD1.7 billion standalone petrochemical plant at its Port Arthur facility, which produces a base ingredient in plastics from natural gas, a company official confirmed, as per BeaumontEnterprise.
If Total were to move forward with plans to build a new ethane cracker, it would mean 3,500 construction jobs and 45 full-time jobs at Total's Port Arthur complex, according to Total's state permit applications.
Jefferson County officials and company executives are negotiating potential tax breaks for the investment, a county official said.
Total spokeswoman Tricia Fuller stopped short of a public commitment to the project. She said the state permit filings are part of the company's process of evaluating the potential for expansion and that nothing has been finalized.
"It is something that's under consideration," Fuller said. "Given the length of the time of the permitting process, we elected to file some applications and begin some work toward Port Arthur as a potential (location) for an ethane cracker."
Total's proposal would generate about 1 million metric tons of ethylene per year through the ethane cracker, a large unit that separates the chemical from the natural gas liquid ethane. The ethylene, a building block for plastics used in goods like athletic shoes or automotive belts, is sent to buyers through pipelines.
In permit filings with the Texas Commission on Environmental Quality, the cracker is classified as a new chemical plant, but it aligns with long-running production at the complex, which is jointly owned by Total Petrochemical and BASF Corporation. Total is the chief sponsor of the new project.
Total converted an existing cracker at the petrochemical plant to feed on natural gas in 2013 and expanded it one year later. Previously, the USD1.5 billion unit processed naphtha, a by-product of liquid petroleum. Now, it can process oil or gas.
Like many Southeast Texas industrial projects, demand for a new ethane cracker is driven by rising supply of shale gas unlocked by a drilling technique called fracking. Long before fracking drove down the price of crude oil, it cheapened natural gas, giving a boost to petrochemical plants that use gas as a feedstock, with many expanding their systems to take in more.
Total's considered project could nearly double the current 1 million ton per year capacity.
Company officials have told county administrators that Total would invest about USD1.6 billion in the project and that BASF would contribute an additional USD130 million to their portion of the project, Jackson said.
As MRC wrote before, Total, Europe’s third-largest oil company, intends to invest EUR160m before 2016 to adapt its petrochemical platform in Carling, in the Lorraine region of eastern France, and to restore its competitiveness. Total plans indeed to develop new activities on the platform in the growing markets for hydrocarbon resins (Cray Valley) and for polymers, while shutting down the acutely loss-making steam cracker in the second half of 2015.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.