Online news for Borealis - Powered by ICIS news


LyondellBasell calls off expansion plans for Texas metathesis unit

ICIS News : 1-Feb-13 18:59

LyondellBasell calls off expansion plans for Texas metathesis unitHOUSTON (ICIS)--LyondellBasell has called off plans to expand its metathesis unit in Texas, citing the flood of on-purpose propylene plants that could be built in North America, the company's CEO said on Friday.

The metathesis unit would convert ethylene to propylene.

Under the company's initial plans, the expansion would boost propylene production by 500m lb/year (227,000 tonnes/year) of equivalent ethylene. The expansion would have cost about $125m (93m) and was scheduled to be completed by 2014.

LyondellBasell took the expansion off the table, given all of the announcements to build propane dehydrogenation (PDH) units in North America, said CEO Jim Gallogly, who made his comments during an earnings conference call.

Companies are considering building up to seven propane dehydrogenation (PDH) plants in the North America.

"Given the announcements of these PDH units that multiple companies are suggesting, we don't think that makes sense," Gallogly said of the previous metathesis unit expansion plan.

In the end, LyondellBasell could actually benefit from all of the new PDH plants, because the company consumes the monomer to produce propylene oxide (PO) and polypropylene (PP).

Although LyondellBasell has called off plans to expand the metathesis unit, the existing unit continues to run.

"We're turning ethylene into propylene because propylene prices have really blown out, and it is profitable for us," Gallogly said.

Recently, US propylene prices have risen sharply.

A propylene producer has nominated a 9 cent/lb ($198/tonne) increase for February, outpacing a 7 cent/lb initiative announced by another supplier in the past few days.

The January contract settlement put polymer-grade propylene (PGP) at 73.00 cents/lb and chemical-grade propylene (CGP) at 71.50 cents/lb, both up by 15 cents/lb from December.

Additional reporting by William Lemos

($1 = 0.74)

By Al Greenwood
+1 713 525 2645

Additional Information