French oil and gas giant Total is to close the ethylene unit at its Carling petrochemical plant, located in the Lorraine region of eastern France, claiming that the steam cracker was not making any profit due to abundant supply that outstripped demand and its inability to keep up with competition from cheaper U.S. production.
Instead, the company will shift focus and use the facilities in Carling to produce hydrocarbon resins and polymers. The company will invest EUR160 million (approximately $213 million) to convert the petrochemical platform by 2016 and plans to close the naphtha cracker during the second half of 2015. The Carling facility will also host a research and development center and a European decision-making center, the company announced.
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Patrick Pouyanné, president of refining & chemicals at Total, explained that the change will allow the company to become a European leader in hydrocarbon resins and polymers production. As an enterprise, Total has the responsibility to adapt its production to changing market conditions and to meet demand, he added.
Total's plan for the Carling platform would utilize its strengths and its industrial capabilities, the company said. The project includes the creation of a thermoplastics unit that would meet increased demand for plastics from the European automotive market, which is seeking to make vehicles lighter and more energy-efficient. Production capacity for polystyrene will also be increased, with plans for Carling to account for the majority of Total's polystyrene output.
