Nova expands presence on US Gulf Coast with Williams acquisition; ups PE capacity

Canadian chemicals firm Nova Chemicals Corporation is to acquire Williams Partners LP’s 88.46% ownership interest in its Geismar, Louisiana, olefins plant, approximately 525 acres of undeveloped land adjacent to the plant, and Williams’ interest in the Ethylene Trading Hub in Mt. Belvieu, Texas, for US$2.1 billion. Upon closing, the Calgary-headquartered Nova and Williams will enter into a long-term arrangement for Williams to transport and supply ethane feedstock to support the plant.

The plant produces approximately 884,000 tonnes/year of ethylene and is located in the US Gulf Coast region, the largest refining and petrochemical production hub in North America. With riverfront access, the adjacent land represents a significant opportunity for future growth.

“This transaction provides us with the opportunity to acquire an operating facility with immediate, positive cash flow, and with access to new customers and the benefits of an experienced workforce. A key component of our growth strategy is to expand to the US Gulf Coast and leverage next generation technology to better serve our customers in the Americas. The Business allows us to diversify our geographic footprint benefiting from access to significant US shale gas reserves and well established petrochemical and supply chain infrastructure,” stated Todd Karran, President/CEO of Nova Chemicals. “Coupled with our recent announcement regarding our plans to form a joint venture with Borealis and Total in Texas, we have taken steps to firmly establish our presence on the US Gulf Coast,” continued Karran. Nova says it will make offers of employment to all employees working at the Geismar plant, along with sales and marketing employees of the business from Williams’ Houston office.

Closing of the acquisition is subject to customary regulatory approvals and other conditions, but is not subject to any financing condition. The parties expect the transaction to close in summer 2017.

Currently, Nova Chemicals, a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates, says it is working on three opportunities to help meet the growing consumer demand for PE:

  • Acquisition of Williams’ Geismar, Louisiana olefins plant and complex
  • Proposed jv with Borealis and Total involving Total’s existing Bayport, Texas polyethylene facility, development of a new light feed cracker in Port Arthur, Texas and a new Borstar technology polyethylene facility in Bayport, with expected start-up in 2020
  • Proposed polyethylene plant utilising Nova’s Advanced SCLAIRTECH technology, base case is Sarnia Ontario, with a final investment decision expected in 2017 and start-up targeted for 2022

Williams Partners is an industry-leading, large-cap natural gas infrastructure master limited partnership with a strong growth outlook and major positions in key US supply basins. Williams Partners has operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. Williams Partners’ operations touch approximately 30% of US natural gas. Tulsa, Okla.-based Williams, a provider of large-scale US natural gas infrastructure, owns approximately 74% of Williams Partners.

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