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Motiva to buy Port Arthur chemical plant
US GULF COAST
Motiva’s 607,000 bpd re nery is the largest in the US.
REFINER Motiva Enterprises has announced that it is buying a chemical plant in Port Arthur, Texas, from an a liate of Flint Hills Resources. is marks the rst move by Motiva, which is a Houston-headquartered subsidiary of Saudi Aramco, into chemical production. e plant is located adjacent to Motiva’s 607,000 barrel per day (bpd) re nery, which is the largest in the US.
Under the deal, unveiled on August 19, Motiva will acquire 100% in Flint Hills’ Port Arthur site. The financial terms of the deal, which is due to close in the fourth quarter of 2019, were not disclosed.
The Port Arthur chemical plant was pur- chased by Flint Hills from Huntsman for $770mn in 2007. e plant includes an ethane cracker with a capacity to produce 620,000 tonnes per year (tpy) of ethylene, which is used in most plastics. e plant also has a unit that can produce 340,000 tpy of propylene.
e deal comes as Aramco is seeking to diver- sify its operations, including by growing its pet- rochemical business as a way to support demand for oil and gas.
Sources familiar with the deal told Reuters that Motiva was planning to operate the chem- ical plant while it builds three major petrochem- ical units at its Port Arthur complex as part of an $18bn expansion of operations along the US Gulf Coast. According to the sources, the chem- ical plant already buys petrochemical feedstock from Motiva’s re nery.
Motiva has been investing heavily in the Port Arthur area since it became the sole owner of the re nery through the break-up of its partnership with Royal Dutch Shell in 2017.
However, in June 2018 Motiva scrapped a major expansion of its re nery, saying it would opt to focus on expanding its petrochemical business instead. And according to documents led with the Texas Comptroller’s o ce earlier this year, Motiva is considering investing into petrochemical facilities in Port Arthur that would include a $4.7bn ethane cracker. If the company decides to proceed with its planned investments and receives the necessary approv- als, this project could be approved in the coming months and completed in 2022.
PROJECTS & COMPANIES
Power outage results in Hibernia spill
NEWFOUNDLAND AND LABRADOR
A power outage on the Hibernia oil production platform o shore Eastern Canada occurred over the weekend of August 17-18, resulting in a spill of 2,200 litres (14 barrels) of oil into the Atlantic Ocean. e incident occurred just 48 hours a er production at Hibernia had resumed following an earlier spill.
A low supply of fuel to the equipment that keeps the power on at the platform, which is located about 315km o shore St. John’s, New- foundland and Labrador, was blamed for the latest outage. A spokesperson for Hibernia Management and Development Co. (HMDC) told CBC News on August 19 that the fuel valve leading to the main power generator had closed and did not supply fuel to the power generator. When the power went out on the platform, this prompted the sprinkler system to activate. is in turn triggered Hibernia’s waste containment drain system, which contained water and oil, to over ow from the platform into the ocean.
Backup generators on Hibernia are supposed to activate immediately in the event of an outage. But HMDC’s president, Scott Sandlin, told CBC News that he did not know how long it took the generators to activate, adding that this was under investigation.
Production is currently shut down while separate investigations by HMDC and by the Canada-Newfoundland and Labrador O shore
Petroleum Board (C-NLOPB), the provincial regulator, are being carried out.
Newfoundland and Labrador’s Minister of Finance, Tom Osborne, was reported as saying there is a CAD2.5mn ($1.9mn) impact each day Hibernia is shut down. However, the province is trying to diversify its economy away from oil production and now depends on it for about 11% of its revenue, down from 30% of revenue 10 years ago, according to Osborne.
e minister said CAD80mn ($60mn) in rev- enue was deferred in the last scal year owing to production being shut down a er an oil spill from Husky Energy’s White Rose project in November 2018. He warned that an even higher amount could be deferred this year.
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