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Expected to close in early 2016, deal marks a key step in restructuring of BP’s global petrochemicals business
BP has agreed to sell its petrochemical complex in Decatur, Alabama, to Indorama Ventures Public Company Limited, as part of a previously announced effort to refocus its global petrochemicals business for improved profitability and long-term growth.
The divestment is in line with BP’s global petrochemicals strategy of pursuing a competitively advantaged portfolio through world-scale, low-cost facilities that utilize BP proprietary technology, including the production of purified terephthalic acid, or PTA, a key raw material in the production of polyester.
“This agreement allows us to focus investment on our world-class PTA production facility in Cooper River, South Carolina, and a key PTA feedstock producer in Texas City, Texas, as well as to maintain a strong position in the important U.S. petrochemicals industry, “said Rita Griffin, chief operating officer of BP Global Petrochemicals.
Under the terms of the agreement, Indorama Ventures will purchase the Decatur complex including working capital and related infrastructure and assume certain contracts with suppliers and customers. The parties anticipate the deal closing to occur in early 2016 when employees will transfer to the new owner.
“We are grateful to our employees who have made the Decatur facility a safe, reliable and valuable contributor to BP’s business for so many years,” said Luis Sierra, head of BP’s global aromatics business unit. “We believe this agreement — with an established global industry leader such as Indorama Ventures –- provides a compelling future for those employees, the site and the community of Decatur.”
The Decatur complex makes chemicals essential for the production of thousands of items, from plastic water bottles to flat-screen televisions. Located on 1,000 acres in Northern Alabama, the complex can produce one million tons per year of PTA, as well as paraxylene (PX), a raw material for PTA production. The site also is the world’s only commercial manufacturer of naphthalene dicarboxylate (NDC), a specialty chemical used in new-generation polyesters and resins used to make LCD flat-panel displays, ultra-thin data storage tape and other products.
Elsewhere, BP is spending $200 million to upgrade its Cooper River, S.C., plant and its sister facility in Geel, Belgium – the largest PTA-producing sites in the Americas and Europe, respectively. The investment will enable the two facilities to lower operating costs, improve reliability and reduce emissions. Earlier this year, BP also started up its new Zhuhai 3 unit in Guangdong Province, China. Using BP’s latest technology and capable of producing up to 1.25 million tons of PTA per year, Zhuhai 3 is the world’s largest single-train PTA production unit as well as being one of the largest and most efficient PTA production units in the world.
BP has substantially completed its $10 billion divestment program for the 2014 and 2015 period. The company expects $3-5 billion of divestments in 2016 and ongoing divestments averaging around $2-3 billion a year thereafter.
