BP has agreed to sell its petrochemical complex in Decatur, Alabama, to Indorama Ventures, 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.
The Decatur complex makes chemicals essential for the production of thousands of items, from plastic water bottles to flat-screen televisions. Located on 1000 acres in northern Alabama, the complex can produce 1 million-ton/yr of PTA, as well as paraxylene (PX), a raw material for PTA production. The site also is a 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 US$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, which is capable of producing up to 1.25 million-ton/yr of PTA.
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.
Image: Decatur complex/ BP Flickr