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LyondellBasell Builds New PO/TBA Plant on U.S. Gulf Coast

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Chemical giant LyondellBasellLYB said that it is advancing plans to construct a world scale plant on the U.S. Gulf Coast for producing propylene oxide (PO) and tertiary butyl alcohol (TBA), leveraging the shale gas boom in the region. The new PO/TBA facility, considered to be the largest of its kind, will be built in the Houston area. The company first announced the project in August last year.

The PO/TBA plant will have annual capacity of 1 billion pounds of PO and 2 billion pounds of TBA. The project is expected to offer as much as 2,500 construction job opportunities. LyondellBasell's complex in Channelview, TX, has been chosen as the site for the PO/TBA facility.

LyondellBasell will soon commence front-end engineering design work and file environmental permit applications. The company will make a final investment decision after the completion of the engineering design work.

The plant will market PO globally to address growing demand for polyurethanes that are mainly used to make bedding, furniture, carpets and car seats. Moreover, TBA and its derivatives will be sold to meet the requirements for high octane gasoline blending components and for making synthetic rubber and lubricant additives.

LyondellBasell continues to gain from favorable North American natural gas environment and is executing its expansion projects to leverage the U.S. natural gas liquids (NGLs) advantage. The U.S. Gulf Coast is an advantaged feedstock region due to the abundance of shale-derived NGLs. The new project integrates LyondellBasell's proprietary PO/TBA technology with cheap feedstock advantage.

The PO/TBA project is part of LyondellBasell's earlier announced $3-$4 billion expansion that will take place on the U.S. Gulf Coast over the next five years. The company remains on track with its multi-plant ethylene expansion programs across Channelview, La Porte and Corpus Christi facilities in Texas which benefit from shale gas production.

LyondellBasell has already completed an 800-million pound per year expansion at its La Porte site and a 250-million pounds per year expansion at the Channelview facility. The addition of 800 million pounds of capacity at the Corpus Christi plant is expected to complete by second-quarter 2016. The expansion program, when in full swing, is expected to expand annual ethylene capacity by as much as 2.3-2.4 billion pounds in North America.

LyondellBasell is a Zacks Rank #3 (Hold) stock.

Better-ranked companies in the chemicals space include Celanese Corporation CE , Innospec Inc. IOSP and Stepan Company SCL , all carrying a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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