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HOUSTON-Shell Oil Co. says it is collaborating with two other companies – BASF Corporation and Atofina Petrochemicals Inc. – to build a $200-million chemical plant in Port Arthur, TX.

According to Shell, the three companies are in the final stages of negotiations. Shell will own about 60% of the Sabina Petrochemicals venture; BASF, 24%; and Atofina, 16%.BASF Corp., based in Mount Olive, NJ, is the North American subsidiary of German chemical giant BASF AG. Atofina is a subsidiary of TotalFinaElf, a publicly traded oil company. Shell Oil Co., based in Houston, is a leading oil and natural gas producer and petrochemical manufacturer.

Construction will begin on the plant next year, after regulatory permits are obtained, and operations are expected to begin in 2003. The complex, which should employ about 40 BASF employees and 25 full-time contract maintenance employees, will pay about $4 million per year in property taxes.

Port Arthur, with a population of 58,500, is located in the southeastern corner of Texas on the Gulf Coast, 20 miles southeast of Beaumont and 80 miles east of Houston. The city is bordered by Sabine Lake, the Gulf of Mexico and the Neches River, and is near the center of the Gulf Intercoastal Waterway. Because of shipping, the area is a popular home for refineries.

The Sabina Petrochemicals venture expects to award a contract to ABB Lummus Global Inc. and Zachry Construction Corp., which have formed a joint venture to engineer, procure and construct the facility. The construction workforce is anticipated to peak at approximately 900 workers.

One unit at the dual-use plant will produce butadiene, a chemical used in the production of rubber and plastic products; the other, indirect alkylation, a component used in high-octane gasoline. The butadiene will be used in the production of rubber and plastic products in Beaumont, Port Arthur and Orange.

Sabina Petrochemicals intends to deliver the butadiene to customers by pipeline after securing pipeline connections between the new facility and butadiene feedstock facilities in Deer Park, TX.

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