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NOVA Chemicals, Borealis And Total Petrochemicals To Form Joint Venture
Mar 29, 2017 (MarketLine Financial Deals Tracker via COMTEX) -- (c) 2001-2016 Marketline. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Marketline shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.

NOVA Chemicals Corporation, a plastics and chemical company, and Borealis AG, a provider of solutions in the fields of polyolefin, base chemicals and fertilizers, signed a preliminary agreement to form a joint venture (JV) with Total Petrochemicals and Refining USA, Inc., a diversified petrochemical company and a subsidiary of Total S.A., to develop and own a new light feed ethylene cracker and a new Borstar polyethylene (PE) facility in Texas, the US. The JV will build a new 1000 ktpa (2.2 b lb) ethylene cracker in Port Arthur; and a new 625 ktpa (1.35 b lb) Borstar PE plant in Bayport, Texas. The JV also includes Total's Bayport PE facility, which has a total capacity 400 ktpa (880 m lb). The ethylene cracker and Borstar PE unit are expected to start-up in late 2020. The JV will create significant synergies by enabling strong integration of the value chain and the first-time use of the proprietary Borstar polyethylene process technology in the Americas; and will also provide competitive export access to markets outside of North America. Total is expected to hold 50% stake in the JV. The transaction will enable NOVA Chemicals to complement its existing asset structure in Canada and broaden its PE product slate. The transaction is expected to be completed late in 2017, subject to pending NOVA Chemicals' Board and regulatory approvals and execution of definitive agreements. Todd Karran, president and CEO of NOVA Chemicals, said, "This opportunity will complement NOVA Chemicals' existing asset structure in Canada and broaden our PE product slate as we continue to grow our business in the Americas to deliver products that make everyday life healthier, safer and easier. It also paves the way for NOVA Chemicals to collaborate further with Borealis as part of the IPIC family of companies." Mark Garrett, CEO of Borealis, said, "Working in a JV with NOVA Chemicals and Total on a cost effective brownfield investment project, integrated with a cracker is an attractive opportunity. We can also leverage our proven technology and benefit from large scale experience gained in other projects (e.g., Borouge) and develop the project together with NOVA Chemicals."

Deal Participants

Deal Rationale

The transaction will enable NOVA Chemicals to complement its existing asset structure in Canada and broaden its PE product slate.

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