LONDON: Motiva Enterprises, the US refining unit of Saudi Aramco, has struck a deal to buy the Flint Hills Resources chemical plant in Texas.
The plant is located next to Motiva’s 630,000 barrels-a-day Port Arthur refinery — the largest in the US. The deal represents a significant move downstream by Motiva.
“This marks the entry of Motiva into the chemical industry,” said Patrick Kirby, Wood Mackenzie principal analyst.
“It remains unclear as to what Motiva has planned post-acquisition, however some options could include strengthening refinery-chemicals integration, expansion of the asset capacity or potentially longer-term derivative plant development. The company has also expressed plans for further chemical developments at Port Arthur, including a world-scale steam cracker and aromatics facility.”
Saudi Aramco is increasing its global footprint in the petrochemicals business as it seeks to reduce its dependence on crude oil sales by developing new added value revenue streams. The world’s largest national oil company in March announced plans to acquire SABIC, the region’s largest petrochemical company, based in Riyadh.
Last week it also emerged that Saudi Aramco planned to acquire a 20 percent stake in the oil-to-chemicals business of India’s Reliance Industries.
Motiva did not disclose its plans for the Texas plant, but said that the potential acquisition was targeted to close in the fourth quarter of 2019.