By OGJ editors
HOUSTON, Mar. 28 -- Philadelphia-based Sunoco Inc. Friday reported signing a long-term definitive agreement with Equistar Chemicals LP—a joint venture of Lyondell Chemical Co. and Millennium Chemicals Inc. —to form a new limited partnership involving Equistar's La Porte, Tex., ethylene facility.
According to the agreement, Equistar and the partnership will enter into a 15 year, 700 million lb/year propylene supply contract with Sunoco. Of this amount, 500 million lb will come from the La Porte partnership and the remainder will be based on another long-term contract.
Pricing for the majority of Sunoco's purchases will be based on a cost-based formula that includes a fixed discount, the company said. Equistar will continue to manage and serve as operator of the La Porte facility on behalf of the partnership.
Separately, Sunoco reported it would purchase Equistar's Bayport 400 million lb/year polypropylene facility at Pasadena, Tex., for $190 million.
Currently Sunoco operates an 800 million lb/year polypropylene plant at La Porte as well as polypropylene facilities at Neal, W.Va., and Marcus Hook, Pa.
The deal is expected to close by Mar. 31.
