Saudi-owned Motiva Enterprises, which owns North America’s largest refinery, plans to add to its portfolio east of Houston with the purchase of Flint Hills Resources’ ethylene cracker.
The U.S. arm of Saudi Arabia Basic Industries Co., aka Aramco, agreed to pay an undisclosed amount for the cracker in Port Arthur, which is adjacent to its 607,000 b/d refinery. The transaction is expected to be completed by year’s end.
The Flint Hills plant has estimated ethylene capacity of about 634,000 metric tons/year (mty) and propylene capacity estimated at 365,000 mty. The plant, a merchant cracker on nearly 210 acres near the Houston Ship Channel, makes ethylene, cyclohexane and polymer grade propylene.
Aramco last year signaled it wanted to expand its U.S. petrochemical operations. In April 2018 it signed memorandums of understanding (MOU) with TechnipFMC and Honeywell UOP to study at least two petrochemical projects worth an estimated $8-10 billion.
One of the MOUs was to evaluate the use of TechnipFMC’s ethylene production technologies in the United States, and the second enabled Motiva to examine the use of Honeywell aromatics extraction and production technologies for benzene and paraxylene to develop a potential complex along the Gulf Coast.
Aramco also has partnerships with several U.S. energy companies and other global operators that combined are worth $10 billion-plus.
The Saudi dealmaking in the United States has coincided with potential plans to spin off Aramco eventually as a public company valued at up to $2 trillion. Those plans are said to be paused but still on the table.
The Gulf Coast has seen a plethora of natural gas- and oil-related expansions since the Lower 48 production renaissance. Multiple petrochemical expansions are underway from Corpus Christi in South Texas to the coast of Louisiana.
In addition, several liquefied natural gas export projects are in operation or underway from far South Texas into Louisiana, and there are multiple pipelines from the Permian Basin designed to carry supply to coastal destinations for export.
Flint Hills, controlled by Charles and David Koch, purchased the Port Arthur facility in 2017 from Huntsman Corp. for $770 million.