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.
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 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.
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.