Deal is largest in Indorama Ventures’ history
Impact of adjacent TPC Group blast ‘limited’
Indorama Ventures has closed on its $2 billion acquisition of Huntsman’s chemical intermediate and surfactants businesses, significantly widening its US footprint into higher margin integrated oxides and derivatives and specialty chemicals segments, the company said Monday.
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The deal allows Huntsman to focus on its growing polyurethanes business as well.
The deal includes manufacturing operations in Texas, Australia and India. Indorama has acquired 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 (EO)/monoethylene glycol (MEG) unit; and a propylene oxide/MTBE plant, which also produces surfactants and amines. Huntsman retained ownership of a diglycolamine (DGA) plant at Port Neches.
On December 2, Huntsman said the PO/MTBE unit would be idled indefinitely after a November 27 explosion and fire in a butadiene unit at TPC Group’s adjacent complex in Port Neches.
The idled unit was not damaged by the explosion and fire. However, Huntsman stored MTBE at the TPC site, so the blast affected its operations.
In a presentation to investors dated Friday, Indorama noted that impact from the TPC blast was “limited” and that a turnaround on the PO/MTBE unit that had been planned for April 2020 was pushed up to December 2019. The unit was expected to be back online by March this year. As a result, there will be “no effect on 2020 planned production volume,” the presentation said.
LARGEST DEAL IN COMPANY HISTORY
The deal is the largest in Indorama Ventures’ history, the company said. “It has a well-integrated assets base with an extensive infrastructure and future expansion possibilities,” and is adjacent to many US Gulf Coast feedstock suppliers, Indorama said.
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 now owned by Indorama 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, according to the companies.
LAB is a surfactant used to make chemicals in laundry detergent, lubricant additives and in oil production. Of the chemical intermediate operations being sold, EO makes MEG, which in turn makes polyester fibers, 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 rely on foreign sources of MTBE demand, particularly in Latin America.
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