LyondellBasell and Sasol form integrated PE joint venture in Louisiana
Canadian Plastics
MaterialsHouston-based LyondellBasell is paying US$2 billion to acquire a 50/50 stake in Sasol's new petrochemicals complex in Lake Charles.
Materials supplier LyondellBasell is acquiring a 50 per cent stake in energy and chemical company Sasol Ltd.’s new petrochemicals complex in Lake Charles, Louisiana.
Houston-based LyondellBasell is paying US$2 billion to purchase its stake in the complex, which opened last year and produces approximately 2 billion pounds of low and linear low density polyethylene (PE) resin annually.
The joint venture will operate under the name Louisiana Integrated PolyEthylene JV LLC.
“This investment represents a unique opportunity to bring together the best of both companies and create deep, long-term value while immediately realizing the many benefits of new, strategically-located, world-scale assets,” said Bob Patel, CEO of LyondellBasell in an Oct. 2 statement. “This approach is consistent with our strategy of investing in high quality assets that meet our threshold for value creation, while also maintaining our investment grade rating and commitment to our dividend.”
In the statement, LyondellBasell said the investment in the JV allows the company to expand in a core area of its business and leverages the company’s operational and commercial strengths. “Additionally, by investing in these assets, [we] will realize immediate returns and eliminate customary construction risks associated with new project execution,” the statement added.
For South Africa-based Sasol, meanwhile, the transaction represents what it calls “a significant step” in achieving its financial and strategic objectives by reducing net debt and rapidly shifting the company’s portfolio towards specialty chemicals.
The transaction is expected to close by the end of 2020, and some Sasol U.S. employees will become employees of LyondellBasell.
Sasol will retain full ownership and operational control of its Lake Charles Research and Development complex, Lake Charles East Plant ethane cracker, and U.S. Performance Chemicals Business assets in Lake Charles, which produce Ziegler alcohols and alumina, ethoxylates, Guerbet alcohols, paraffins, comonomers, linear alkyl benzene, ethylene oxide and ethylene glycol.
