Total, Mubadala to Invest $1.7bn in US Gulf

France's Total is entering a partnership with Austria’s Borealis and Canada’s Nova – subsidiaries of Abu Dhabi state-owned Mubadala-IPIC – with the aim of building a new 1mn metric ton/yr ethane steam cracker as well as a new polyethylene unit on the US Gulf Coast at a cost of $1.7bn.

Ethane is a naturally occurring constituent of natural gas.

Abundant shale gas in the US provides two competitive advantages for petrochemicals, said Total: access to low-cost energy to run the facilities, and competitively-priced ethane feedstock. Earlier this month, ExxonMobil's new CEO Darren Woods said that that the US supermajor is midway through a $20bn capital investment programme in US Gulf petrochemicals and refining that the US shale gas and oil boom will feed.

Total CEO Patrick Pouyanne said: “We want to take advantage of the business-friendly environment to contribute to making American petrochemicals even greater; by joining forces with Borealis and Nova, we aim to create a major player in the US polyethylene market.”

The three-way joint venture with Nova and Borealis – to be 50% owned by Total -- is expected to be established late 2017 when final investment decision on the new 625,000 mt/yr polyethylene plant at Bayport will be taken; the venture will include Total’s existing polyethylene 400,000 mt/yr plant there.

The contract to build the ethane steam cracker at Port Arthur, Texas, has been awarded by Total to CB&I. The $1.7bn cracker is due to start up in 2020. The new cracker will be built alongside Total’s Port Arthur refinery and the existing Total/BASF steam cracker.

Total is also active upstream in the US Gulf’s deepwater and in the onshore Barnett (Texas) and Utica (Ohio) shale basins. It has contracted LNG export capacity, and has a stake in Houston-based Tellurian whose planned Driftwood LNG export terminal project in Texas received FTA export approval.

Mark Smedley