Total SA of France is creating a joint venture with Calgary-based Nova Chemicals Corp. and Austria-based Borealis AG to invest $1.7 billion to build a 1 million ton-per-year ethane steam cracker in Port Arthur, Texas, next to Total's existing refinery.

The companies will also build a 625 kt/year polyethylene unit next to an existing unit in Bayport, Texas.

The joint venture is expected to be established in late 2017 and will decide then whether to proceed with the projects.

The $1.7 billion cracker is scheduled to start up in 2020. The engineering, procurement and construction contract (EPC) for the ethane steam cracker was awarded to CB&I.

The new cracker will be built alongside Total's Port Arthur refinery and Total/BASF existing steam cracker.

By leveraging synergies with its existing platform in Texas, Total says it optimized its capital expenditure and will deliver one of the most competitive cracker projects in the U.S.

"After significant investments in US LNG and US shale gas in 2016, this almost two billion dollar investment signals our determination to strengthen our presence in the United States, where we have operated for 60 years and have more than 6,000 employees" says Patrick Pouyanné, chairman and CEO of Total.

Total says the abundance of available gas in the United States as result of the shale revolution provides two competitive advantages for petrochemicals: access to low-cost energy to run the facilities and competitively priced ethane feedstock.