BP Amoco sells Wilton cracker stake to HICI

The olefins cracker at Wilton, Teesside - for years the subject of wrangles between its joint owners, ICI and BP Chemicals - is to pass into single ownership. BP Amoco has agreed to sell its 20 per cent stake in the cracker, along with its share of associated butadiene and gasoline treatment units, to the newly-formed Huntsman ICI Holdings (HICI).

The deal - in the region of £80million, according to industry sources - will not affect BP Amoco's polyethylene plant at Wilton; it will also carry on using the site's ethylene storage and distribution facilities. The two companies have agreed to sign long-term supply agreements for ethylene.

The deal is a substantial about-turn for the companies, as BP Amoco has been in negotiations to buy a proportion of the 80 per cent ICI stake in the cracker, as part of ICI's withdrawal from basic chemicals; the talks, it is believed, foundered on disagreements over the value of the assets. The sale of the industrial divisions to Huntsman (see PE May, p4) changed the picture, however, with the cracker becoming a viable and valuable asset for HICI. Peter Huntsman, president and chief executive of HICI, describes the deal as `a major breakthrough for HICI in increasing our olefin and propylene position in Europe, and laying a stronger foundation for the building of our intermediate and speciality chemicals businesses.'

The deal does not affect BP Amoco Chemicals' overall strategy for northern Britain, comments chairman Bryan Sanderson. `This agreement will assist both BP Amoco and HICI to develop our respective petrochemcials businesses in the North East UK and bring an important new investor into the region,' he says. BP Amoco is currently enganged in a major plant-building programme at Grangemouth and Hull, and is constructing a pipeline linking the two sites which runs through Wilton.