LyondellBasell US ethylene expansion to come on line in Q2 2014

31 January 2014 21:21 Source:ICIS News

HOUSTON (ICIS)--LyondellBasell expects its US ethylene expansion projects to begin coming on line in the upcoming months, the company said on Friday.

In the second quarter, LyondellBasell should complete the expansion of its cracker in La Porte, Texas, the company said.

Capacity should increase by 800m/lb/year (363,000 tonnes/year).

In the first quarter of 2015, the company should complete a 250m lb/year ethylene expansion at Channelview, Texas. In the fourth quarter of that year, it should complete an 800m lb/year expansion at Corpus Christi, Texas.

The projects should give LyondellBasell the equivalent of a new cracker, said Jim Gallogly, LyondellBasell CEO. He made his comments during an earnings conference call.

LyondellBasell is among several companies that are expanding their US ethylene capacity to take advantage of growing supplies of low-cost natural gas liquids (NGLs), made possible by the advent of shale gas and tight oil.

LyondellBasell had adopted a strategy of expanding existing crackers, allowing the company to bring new capacity on line faster and cheaper versus building new plants.

The strategy could help LyondellBasell avoid some of the cost run-ups that are threatening new-plant projects.

In December, the Federal Reserve noted that refiners and petrochemical companies are having trouble finding engineers and construction labourers for current and proposed plant expansions.

Already, Shell has abandoned plans to build a $12.5bn gas-to-liquids (GTL) plant in Louisiana because of rising costs.

NOVA Chemicals had delayed when it would decide on building a new polyethylene (PE) plant because of worries about construction costs.

Methanex CEO John Floren said that a new batch of methanol-plant projects is facing labourer shortages and cost hikes.

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By Al Greenwood