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BASF and Total merge Port Arthur operations into BASF Total Petrochemicals

BASF FINA Petrochemicals LP and Sabina Petrochemicals to merge into one joint venture

The global chemical leader BASF SE, from Germany, and the international oil company Total SA, from France, have decided to merge the assets of the two joint ventures they have in Port Arthur, Texas, USA, to create a new joint venture called BASF TOTAL Petrochemicals LLC.

BASF Corporation (BASF) and Total Petrochemicals & Refining USA Inc. (TPRI) own and operate two joint ventures in Port Arthur:

 – BASF FINA Petrochemicals Limited Partnerships (BASF FINA Petrochemicals LP)

 – Sabina Petrochemicals LLC

The BASF FINA Petrochemicals LP joint venture is located next to Total’s Port Arthur refinery.

As one of the largest naphtha steam cracker in the worldBASF FINA Petrochemicals LP produces:

 – 816,000 t/y of ethylene

 – 862,000 t/y of propylene

 – Butadiene by extraction process for synthetic rubber

 – Alkylate for additives in high performance gasoline.

In the BASF FINA Petrochemicals LP joint venture, BASF and Total share working interests as following:

 – BASF 60% , is the operator

 – Total 40%

The other joint venture Sabina Petrochemical LLC was involving Shell, BASF and Total, but Shell went out on August 2011, so that BASF and Total were the sole owners to operate the facilities with the resulting interests:

 – BASF 60%

 – Total 40% 

Sabina Petrochemicals LLC is producing all the C4 hydrocarbon derivatives.

BASF and Total simplify Port Arthur structures to invest in mixed cracker

In merging the assets of their previous joint ventures BASF FINA Petrochemicals LP and Sabina Petrochemicals LLC, BASF and Total establish a new joint venture called BASF TOTAL Petrochemicals LLC where the working interests will remain as previously set up:

 – BASF 60%, is keeping the operator role of the new entity

 – Total 40%

BASF and Total had created these joint ventures to benefit from BASF’s steam cracking and petrochemical experience and from Total FINA’s refining expertise and productivity.

Receiving the feedstock from Total’s refinery, the two joint ventures were taking competitive advantage from the integrated refinery-petrochemicals business model in one location such as Port Arthur.

With Total leading operations on refining side and BASF on the petrochemical side, both companies can optimize the whole hydrocarbons value chain from crude oil to the building blocks of the petrochemical industry and all associated by-products.

In addition the BASF FINA Petrochemicals LP joint venture generates some extended added value in providing Total with the feedstock to its High Density Polyethylene (HDPE) facility in Bayport and Polypropylene plant in La Porte.

Convinced by the advantages of this integrated business model and the constructive cooperation between the both companies, BASF and Total decided to move one step ahead in this integration process in merging the assets of the two joint ventures in one.

Without affecting the working interests of BASF and Total in the respective entities, the merger simplifies the structure and facilitates the operations management for BASF.

With the abundance of the shale gas invigorating the petrochemical industry in USA, BASF and Total cannot miss this opportunity and should proceed to the conversion of their naphtha steam cracker into mixed cracker in order to accept ethane feedstock as well as naphtha.

In announcing the merger of their Port Arthur joint ventures, BASF and Total Petrochemicals prepare ground for capital expenditure on the newly formed BASF TOTAL Petrochemicals LLC entity in order to leverage the synergies between BASF FINA Petrochemicals LP and Sabina Petrochemicals LLC through the shale gas opportunity.

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