Huntsman Is Selling Its Butadiene Unit

As part of its effort to focus more on specialty chemicals and less on commodities, Huntsman Corp. is selling its butadiene business to Texas Petrochemicals (TPC) for $275 million.

The sale includes a butadiene and methyl tert-butyl ether plant in Port Neches, Texas, that extracts butadiene from refinery C₄ streams and manufactures MTBE for refiners on a contract basis. The plant has the capacity to make 900 million lb of butadiene per year and 11,000 barrels of MTBE per day.

The Huntsman business had revenues of $626 million and earnings before taxes of $43 million in 2005. The purchase will give TPC, which specializes in upgrading C₄ streams, about $1.7 billion in annual revenues. TPC sees synergies with its existing C₄ business after the transaction closes in midyear.

Huntsman obtained the Port Neches facility as part of its 1994 acquisition of Texaco Chemical. ???We purchased a plant in 1994 that was on the verge of closure,??? says CEO Peter R. Huntsman. ???This sale to TPC will ensure a long-term future for this site.???

Not included in the sale is Huntsman???s business in MTBE that it produces as a by-product of propylene oxide production, also in Port Neches. The company says that business, which represents most of its MTBE output, produces MTBE more cheaply than does the C₄-based plant.

Huntsman intends to use the proceeds from the sale to fund its purchase of Ciba Specialty Chemicals??? textile chemicals business. In a conference call on Friday, the company said that should it spin off its commodity chemicals business, it would likely do so in the second half of the year (C&EN, Feb. 27, page 9).