Nova buying majority stake in Louisiana olefins plant
The $2.1 billion purchase is designed to help Calgary-based Nova grow its U.S. Gulf Coast presence.
Calgary-based Nova Chemicals Corporation is buying a majority stake in infrastructure supplier Williams Partners LP’s olefins plant in Geismar, Louisiana for $2.1 billion.
Nova will acquire Williams Partners’ 88.46% stake in the olefins plant, including approximately 525 acres of undeveloped land adjacent to the plant, and Williams’ interest in the ethylene trading hub in Mt. Belvieu, Texas.
Under terms of the deal, Williams Partners’ subsidiaries will enter long-term contracts to supply Nova with feedstock through its pipeline system.
The plant produces approximately 1.95 billion lbs of ethylene annually and is located in the U.S. 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, Nova said in a statement. “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,” Todd Karran, Nova’s president and CEO, said in the statement. “A key component of our growth strategy is to expand to the U.S. Gulf Coast and leverage next generation technology to better serve our customers in the Americas. This allows us to diversify our geographic footprint benefiting from access to significant U.S. shale gas reserves and well established petrochemical and supply chain infrastructure.”
The transaction is expected to close in summer 2017.