TotalEnergies SE TTE and Borealis announced the beginning of the 625,000 metric ton per year Borstar polyethylene (PE) unit of their joint venture (JV) — Bayport Polymers LLC (Baystar). The project is aimed at more than doubling the production capacity at Baystar’s site in Bayport, TX.
TTE’s Focus on Petrochemicals Venture
In 2022, TotalEnergies signed the JV, Baystar, marking the beginning of commercial operations of a new ethane cracker. The nearly $2-billion project was built on the site of Port Arthur, TX, and operated by the TotalEnergies Refinery in the same area. This investment is in sync with the company’s strategy to develop petrochemicals at its integrated platforms.
The new PE unit, Bay 3, brings the total production at Baystar site to more than 1 million tons annually, including the two legacy production units. The cutting-edge patented Borstar 3G technology is available at Bay 3 for the first time in North America.
The new $1.4-billion transaction completes the integrated Petrochemicals Partnership between the partners that also include the modernized Bayport PE and ethane crackers at the TotalEnergies Platform in Port Arthur.
In July 2023, TotalEnergies and INEOS announced a further integration of their petrochemical assets in Eastern France. TTE will sell its investment in the Lavéra assets to INEOS, in addition to a 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.
Growth Prospects
The polyethylene market is primarily driven by its extensive usage in various industries such as packaging, construction and consumer goods. Polyethylene’s strength and durability make it the most preferred material in the packaging industry that fosters its demand across the globe.
According to a GlobeNewswire report, the global polyethylene market size was valued at $119.2 billion in 2023 and is projected to reach $157.76 billion by 2031, witnessing a CAGR of 4.4% during 2023-2031.
Price Performance
In the past six months, shares of TotalEnergies have risen 2.6% compared with the industry’s 7.2% growth.
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Zacks Rank & Stocks to Consider
TotalEnergies currently carries a Zacks Rank #3 (Hold).
Some better-ranked stock from the same sector are Constellation Energy Corporation CEG, Black Stone Minerals BSM and Peabody Energy BTU, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CEG’s long-term (three to five years) earnings growth rate is 23.3%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) indicates a 1,216.3% increase year over year.
The Zacks Consensus Estimate for BSM’s 2023 EPS is pegged at $1.86. The company delivered an average earnings surprise of 20.9% in the last four quarters.
The Zacks Consensus Estimate for BTU’s 2023 EPS is pinned at $4.95. The company delivered an average earnings surprise of 8.5% in the last four quarters.
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