MOSCOW (MRC) -- LyondellBasell and Sasol (Johannesburg) have closed a previously announced USD2-billion transaction that sees the companies form their Louisiana Integrated Polyethylene joint venture (JV) at Lake Charles, reported Chemweek.
LyondellBasell now owns 50% of Sasol’s new 1.5-million metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) plants - with combined capacity for 900,000 metric tons/year - as well as associated infrastructure at Lake Charles. The deal was closed on 1 December following regulatory and shareholder approvals, with the proceeds to be received within two days of closing, Sasol says.
LyondellBasell will operate the three assets and market the polyethylene (PE) products on behalf of the JV shareholders. Approximately 400 of Sasol’s employees at Lake Charles who directly support the assets have now joined LyondellBasell, the companies say. Sasol achieved beneficial operation of the final plant at the Lake Charles Chemicals Project, the 420,000-metric tons/year LDPE unit, mid-November.
“The formation of this JV is part of our approach to growing our core businesses while positioning the company to benefit from improving economic conditions,” says LyondellBasell CEO Bob Patel. “We believe our ability to operate efficiently and serve growing markets will create exceptional long-term value for our shareholders of both companies.”
“This transaction accelerates the transformation of our chemicals business toward a focus on specialty chemicals,” says Sasol’s president and CEO Fleetwood Grobler. “We’re proud of the world-scale assets we’ve built in southwest Louisiana and look forward to working with LyondellBasell to realize their full potential and create value for all our stakeholders.”
LyondellBasell agreed in October to acquire the 50% stake in Sasol’s base chemicals business at Lake Charles. The agreement included customary rights for each partner regarding the potential future sale of its ownership interest, the companies said at the time.
Sasol has retained full ownership and operational control of its existing 454,000-metric tons/year Lake Charles East Plant ethane cracker, an R&D complex, and its performance chemicals assets at Lake Charles producing Ziegler alcohols and alumina, ethoxylates, Guerbet alcohols, paraffins, comonomers, linear alkylbenzene, ethylene oxide, and ethylene glycol.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 32 countries. The company develops and commercialises technologies, and builds and operates world-scale facilities to produce a range of high-value product stream, including liquid fuels, petrochemicals and low-carbon electricity.
LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.