* Job positions to be cut at plant but workers to stay on
* Total declines to comment
* European petrochem firms vulnerable to cheap US ethylene
STRASBOURG, France, Sept 3 Total is expected to
announce a decision to close the ethylene manufacturing
operation at its Carling petrochemical plant, which faces
surplus supply in eastern France and competition from cheap U.S.
ethylene, union officials said.
Total will present its project on the future of Carling's
550-strong workforce on Wednesday afternoon during a works
council at the group's headquarters in Paris.
"We are convinced that the plan is to shut down the last
operating steam cracking unit (on the site)," Aldo Scalzo, a
senior CGT union official at the factory, told Reuters.
"There is a high probability that this is the scenario that
is shaping up," said Geoffroy Caillon, who heads the CFDT union
at the site.
Closing the unit would bring the production of ethylene and
propylene - the basic products used in many types of plastics -
to a halt. Total plans to invest in boosting polystyrene output
instead, the union officials said.
Cheap U.S. ethylene - a basic building block for plastics
and textiles - is forcing European and Asian plants to rethink
their output mix. Shale gas crackers in the United States can
produce ethylene at less than half the cost of oil-based
Over the next three to four years, as many as 16 plants
using shale gas are expected to start up in the United States.
Total declined to comment. It is not legally allowed to
publicly discuss the content of a works council before it takes
The union representatives said the closure was likely to
lead to the elimination of 350 jobs at the plant, although the
workers would be moved to other positions in the company.
Total shut the first steam cracking unit on the Carling site
in 2008. The other unit was out of action for several months
after an accident in 2009 and has since run at 320,000 tonnes
annual output out of a total capacity of around 400,000 tonnes.
European crackers earned $659 per tonne for ethylene after
subtracting feedstock and energy costs this year, versus $798 in
the United States, according to market researcher ICIS.
Forty-eight of these sites, called steam crackers, are
spread across Europe, mainly in Benelux, Germany and France.
Eastern France has a surplus of ethylene output, Scalzo
The union representatives also said the Carling site had
handicaps, including not being close to a refinery or a port.