BASF FINA Petrochemicals Celebrates Start of Construction
of World's Largest Steam Cracker
PORT ARTHUR, TEXAS, November 12, 1998 -- BASF FINA Petrochemicals
Limited Partnership and Southeast Texas community leaders today
celebrated the start of construction of the world's largest liquids
steam cracker and the economic development impact it will have
on the Golden Triangle region.
BASF FINA Petrochemicals Limited Partnership is a venture between
BASF Corporation (Mount Olive, N.J.) and FINA, Inc. (Plano, Texas).
The limited partnership, in which BASF holds a 60 percent share
and FINA holds a 40 percent share, was formed to manage the operations
of the steam cracker project and related facilities. The total
investment will be approximately $1 billion, with mechanical completion
expected by the end of the year 2000.
The steam cracker is being built adjacent to FINA's Port Arthur
refinery and will be operated by BASF on behalf of the partnership.
FINA will retain sole ownership of its refinery, and will be responsible
for the off-site facilities for the cracker, also on behalf of
The cracker will convert naphtha and light hydrocarbons into
mainly ethylene and propylene, which are key raw materials in
the manufacture of plastics, fibers, solvents, paints and surfactants
(surface-active agents). These products are used in various industries,
including housing, construction, automotive, textile and clothing,
beverage containers and cosmetics.
BASF FINA Petrochemicals awarded a lump sum, turnkey contract
to ABB Lummus Global for engineering, procurement, and construction
services. In turn, Lummus hired HB Zachry as general contractor.
Significant cost advantages for both companies
The steam cracker will be the largest single train olefins production
facility in the world with a nameplate capacity of 1.83 billion
pounds (830,000 metric tons) of ethylene and 1.9 billion pounds
(860,000 metric tons) of propylene. The cracker will use a special
technology for enhanced propylene production.
The partnership between BASF and FINA represents the best solution
for both companies for three reasons: First, BASF and FINA achieve
mutually beneficial ethylene and propylene production primarily
for internal use. Second, both companies derive significant cost
advantages from integrating the cracker with FINA's existing refinery.
Third, the companies gain significant economies of scale, which
make it an attractive and efficient investment.
The integration of the cracker into FINA's refinery will provide
an opportunity to optimize refinery and cracker feedstocks, as
well as byproduct streams. The partnership will take advantage
of BASF's steam cracker operating experience and FINA's expertise
in refining and acquiring hydrocarbon feedstocks.
"With its innovative design and the synergies that we derive
from the cracker's integration into a refinery network, this project
will provide us with significant cost advantages," said Carl
A. Jennings, President of BASF Corporation's Chemicals Division.
"The cracker will be the heart of our integrated manufacturing
strategy throughout North America and represents the largest investment
BASF has ever made outside of Europe. It is of major importance
to our company because it will ensure economically attractive,
long-term product supplies of propylene, ethylene and other key
precursors such as butadiene, benzene and toluene for our major
integrated sites, including Freeport, Texas, and Geismar, Louisiana.
"We are very excited about this project because it will
serve as a platform for future expansion in the NAFTA region,
and we are especially delighted to work with such a strong and
progressive partner as FINA," he added.
According to FINA, Inc. President and CEO Ron Haddock, building
the state-of-the-art steam cracker facility at its Port Arthur
Refinery plays a significant role in the company's long-range
business plans. "This investment is of strategic importance
to FINA because it will increase integration between our refining
business and our premiere chemical businesses, while supplying
raw materials to our world-scale derivative plants, where we produce
styrene, polystyrene, polyethylene and polypropylene."
The project is a key step in differentiating FINA's refining
business from the competition. FINA's Port Arthur facility, one
of the nation's leaders in efficient production of fuel products,
has a strategic focus to expand production of chemical feedstocks.
"The opportunity to utilize our refining capacity to support
a jointly-owned, steam cracking operation with an experienced
and outstanding operating partner, like BASF, provides the basis
for a very competitive manufacturing site," Haddock said.
Satisfies BASF's and FINA's increasing internal demand
The cracker's capacity is designed for mainly captive usage
in both companies. For BASF, it will help satisfy additional propylene
requirements that have nearly doubled as a result of recent oxo
alcohol and acrylic acid expansions at the company's Freeport
In addition, the cracker will secure the supply of ethylene
to produce ethylene oxide, styrene and other derivatives. BASF's
manufacturing sites in Freeport and Geismar will be supplied via
pipelines from the new cracker.
For FINA, besides providing an attractive outlet for materials
produced at its refinery, the project will help ensure long-term
security of raw material supply for its rapidly expanding plastics
business with the world's largest steam cracker producing feedstocks
for the world's largest singe-site styrene, polystyrene and polypropylene
plants, as well as FINA's recently expanded polyethylene facility.
FINA's expanded polymer manufacturing facilities will increase
the La Porte, Texas polypropylene capacity to 2.1 billion pounds
per year, and the Bayport polyethylene plant in Pasadena, Texas
to 850 million pounds per year.
Cracking long-chained hydrocarbon molecules
Steam cracking is a key petrochemical technology used to convert
saturated hydrocarbons such as ethane, propane, naphtha blends
or other feedstocks into olefins and aromatics, including ethylene,
propylene, butadiene, benzene, and toluene. The term "steam
cracking" describes the cracker technology. High temperature
and dilution steam are used to break down long-chained hydrocarbon
molecules into smaller components, primarily light olefins such
as ethylene and propylene. The term "liquids cracker"
refers to the feedstock, which is typically a blend of petroleum
liquids as opposed to liquefied gases such as ethane and propane.