Motiva Enterprises, a subsidiary of the Saudi Arabian national oil company Saudi Aramco, and an affiliate of Flint Hills Resources have signed an agreement for Motiva to acquire a 100 percent ownership interest in Flint Hills Resources Port Arthur site.
The potential acquisition is targeted to close in the fourth quarter of 2019, subject to satisfaction of closing conditions. The parties will not be disclosing the terms of the transaction. Flint Hills acquired the plant from Huntsman Corp. in 2007 for $770 million.
Motiva Enterprises owns and operates North America’s largest refinery in Port Arthur, TX.
The Flint Hills plant operates a 1.57 billion-pound-per-year ethylene cracker, a unit producing nylon component cyclohexane, and a network of pipelines and storage caverns, the sources said to Reuters. Ethylene is a building block for plastics.
Commenting, Patrick Kirby, Wood Mackenzie Principal Analyst, said: "This marks the entry of Motiva into the chemical industry. Port Arthur, LLC includes a 635 ktpa mixed feedstock steam cracker, a cyclohexane plant and associated storage and pipeline infrastructure. The chemical assets are located adjacent to the 635 kbpd Port Arthur refinery, which is the largest in the US. The refinery is fully owned and operated by Motiva, following Shell’s exit in 2017.
"The steam cracker, which can handle a range of feedstocks - including ethane and those form the refinery - forms an integral part of the transaction. The steam cracker primarily produces ethylene and propylene for the merchant market.
"It remains unclear as to what Motiva has planned post-acquisition, however some options could include strengthening refinery-chemicals integration, expansion of the asset capacity or potentially longer-term derivative plant development. The company has also expressed plans for further chemical developments at Port Arthur, including a world-scale steam cracker and aromatics facility."
Motiva has been investing heavily in the Port Arthur area since becoming the sole owner of the 607,000 bpd refinery, after the 2017 break-up of a partnership with Royal Dutch Shell Plc that created Motiva.
In April, according to Reuters, Houston-based Motiva announced it would refurbish two empty, historic buildings in downtown Port Arthur for use as offices. It also has filed documents with the state to build a $5 billion steam cracker that would produce ethylene.
