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TotalEnergies (TTE) & INEOS to Integrate Petrochemical Assets
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TotalEnergies SE (TTE - Free Report) and INEOS have signed an agreement to realign their respective holdings in their production assets and logistical infrastructure, to better represent the balance between their production and internal use of ethylene in eastern France. The agreement will have no operational impact on TotalEnergies’ refining and petrochemical sites.
With this exchange of interests, TotalEnergies is able to better integrate its petrochemical facilities in Feyzin, near Lyon, and Carling, in eastern France, while INEOS is able to expand its activities at the Lavéra site on the Mediterranean coast.
Rationale Behind the Agreement
A pipeline and storage network that starts in Lavéra in south-eastern France and travels via Feyzin to Carling in the north-east connects the companies' ethylene production and consumption facilities in eastern France.
TotalEnergies will sell its investment in the Lavéra assets to INEOS, in addition to part of its interests in the Eastern France ethylene pipeline and storage network. This will be executed to realign the companies’ production and internal use of ethylene.
However, TotalEnergies sells most of the products from the Lavéra steam cracker — which is jointly owned by TotalEnergies and INEOS — to INEOS and does not utilize it.
The company within TotalEnergies is consolidating the crucial function of the Feyzin petrochemical platform as the integrated supplier of ethylene to the Carling platform.
Rising Demand for Ethylene
In 2021, the global market size of ethylene amounted to $176 billion. This figure is projected to increase over the upcoming years, reaching a market size of $287 billion by 2030. In addition, 45 million tons of ethylene capacity will have been added over the 2020-2024 period.
In 2022, TotalEnergies signed a joint venture, Bayport Polymers LLC (“Baystar”), with Borealis, the start-up of commercial operations of a new ethane cracker with an annual production capacity of one million tons of ethylene. The nearly $2 billion project was built on the site of and operated by the TotalEnergies Refinery in Port Arthur, Texas. This investment is in perfect alignment with the company’s strategy to develop petrochemicals at its integrated platforms.
Price Performance
In the past three months, shares of TotalEnergies have lost 8.8% compared with the industry’s 28.8% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
TotalEnergies currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for MAXN’s 2023 earnings per share (EPS) indicates year-over-year growth of 101.7%. It delivered an average earnings surprise of 36.7% in the last four quarters.
The Zacks Consensus Estimate for PED’s 2023 EPS indicates a year-over-year increase of 333.3%. It delivered an average earnings surprise of 22.2% in the last four quarters.
The Zacks Consensus Estimate for EPM’s fiscal 2023 EPS indicates a year-over-year increase of 15.6%. It delivered an average earnings surprise of 38.4% in the last four quarters.
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TotalEnergies (TTE) & INEOS to Integrate Petrochemical Assets
TotalEnergies SE (TTE - Free Report) and INEOS have signed an agreement to realign their respective holdings in their production assets and logistical infrastructure, to better represent the balance between their production and internal use of ethylene in eastern France. The agreement will have no operational impact on TotalEnergies’ refining and petrochemical sites.
With this exchange of interests, TotalEnergies is able to better integrate its petrochemical facilities in Feyzin, near Lyon, and Carling, in eastern France, while INEOS is able to expand its activities at the Lavéra site on the Mediterranean coast.
Rationale Behind the Agreement
A pipeline and storage network that starts in Lavéra in south-eastern France and travels via Feyzin to Carling in the north-east connects the companies' ethylene production and consumption facilities in eastern France.
TotalEnergies will sell its investment in the Lavéra assets to INEOS, in addition to part of its interests in the Eastern France ethylene pipeline and storage network. This will be executed to realign the companies’ production and internal use of ethylene.
However, TotalEnergies sells most of the products from the Lavéra steam cracker — which is jointly owned by TotalEnergies and INEOS — to INEOS and does not utilize it.
The company within TotalEnergies is consolidating the crucial function of the Feyzin petrochemical platform as the integrated supplier of ethylene to the Carling platform.
Rising Demand for Ethylene
In 2021, the global market size of ethylene amounted to $176 billion. This figure is projected to increase over the upcoming years, reaching a market size of $287 billion by 2030. In addition, 45 million tons of ethylene capacity will have been added over the 2020-2024 period.
In 2022, TotalEnergies signed a joint venture, Bayport Polymers LLC (“Baystar”), with Borealis, the start-up of commercial operations of a new ethane cracker with an annual production capacity of one million tons of ethylene. The nearly $2 billion project was built on the site of and operated by the TotalEnergies Refinery in Port Arthur, Texas. This investment is in perfect alignment with the company’s strategy to develop petrochemicals at its integrated platforms.
Price Performance
In the past three months, shares of TotalEnergies have lost 8.8% compared with the industry’s 28.8% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
TotalEnergies currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same sector are Maxeon Solar Technologies (MAXN - Free Report) , Pedevco (PED - Free Report) and Evolution Petroleum (EPM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MAXN’s 2023 earnings per share (EPS) indicates year-over-year growth of 101.7%. It delivered an average earnings surprise of 36.7% in the last four quarters.
The Zacks Consensus Estimate for PED’s 2023 EPS indicates a year-over-year increase of 333.3%. It delivered an average earnings surprise of 22.2% in the last four quarters.
The Zacks Consensus Estimate for EPM’s fiscal 2023 EPS indicates a year-over-year increase of 15.6%. It delivered an average earnings surprise of 38.4% in the last four quarters.