IVL Buys Huntsman's Chemical Intermediates Businesses

IVL Buys Huntsman's Chemical Intermediates Businesses

Indorama Ventures is to buy Huntsman's chemical intermediate and surfactants businesses for US$ 2.1 billion in a deal that will expand the Thai-based petrochemical producer's US footprint while allowing Huntsman to increase its focus on its growing polyurethanes operations. "This acquisition is the largest in the history" of the company, Indorama said in its latest quarterly earnings release. The company said the deal would enhance Indorama's higher margin integrated oxides and derivatives and specialty chemicals segments. Huntsman CEO Peter Huntsman said the sale would accelerate the company's ability to focus on downstream and specialty businesses, "where we will generate more stable margins and consistent, strong free cash flow." The deal is expected to close by the end of the year, the companies said. The deal includes manufacturing operations in Texas, Australia and India. Indorama will buy most of the operations at the Port Neches, Texas, site, including a 235,867 mt/year mixed-feed cracker; a 1 million mt/year ethylene oxide/monoethylene glycol unit; & a propylene oxide/methyl tert-butyl ether (MTBE) plant, which also produces surfactants and amines. Huntsman will retain ownership of a diglycolamine, or DGA, plant at Port Neches. "At the close of the transaction, Huntsman and Indorama will enter into various long-term supply agreements" for products made by operations acquired by Indorama, including propylene oxide, Huntsman spokeswoman Anne Knisley said. Propylene oxide (PO) is among the chain of products used to make polyurethanes, which are used to make mattresses, furniture cushions, insulation, paints, foam toys and vehicle interiors. The plant being sold can produce up to 238,135 mt/year of PO and 988,000 mt/year of MTBE. Huntsman's linear alkyl-benzene (LAB) manufacturing site at the Chocolate Bayou site south of Houston and a surfactants plant in Dayton, Texas, are also included in the deal, the companies said. LAB is a surfactant used to make chemicals in laundry detergent, lubricant additives and in oil production. Of the chemical intermediate operations being sold, ethylene oxide (EO) makes monoethylene glycol (MEG), which in turn makes polyester fibres, antifreeze and polyethylene terephthalate (PET), the resin used to make plastic bottles. MTBE is a gasoline blendstock used to reduce emissions, but it has been phased out of the domestic gasoline blending pool for US consumption and is produced for export. US-based sellers like Huntsman and Enterprise Products Partners rely on foreign sources of MTBE demand, particularly in Latin America. The company already has a 550,000 mt/year MEG plant in Texas and a newly refurbished 440,000 mt/year steam cracker in Lake Charles, Louisiana. Indorama bought the cracker from Occidental Chemical in 2015 and launched an extensive revamp to increase its capacity to the current level from 370,000 mt/year. OxyChem had shut the cracker in 2001. Indorama said the cracker work was mechanically complete in May, but the plant likely will not fully start up until January 2020. Indorama had originally planned to start up the cracker by the end of 2018, but the availability of cheap spot ethylene amid other cracker startups reduced the pressure to ramp up its own unit. The cracker's output "has not been commercialised due mainly to implementation of technical improvements discovered during the testing phase, since spot ethylene availability at a low cost can meet our captive needs," the company said. "We foresee startup of this facility on a permanent basis starting January 2020."