US LyondellBasell allocates $2.4bn for new PO, TBA plant in Texas

LONDON (ICIS)–LyondellBasell has taken a final investment decision on the construction of a propylene oxide (PO) and tertiary butyl alcohol (TBA) plant at its Channelview, Texas, site with a total capital expenditure (capex) of $2.4bn, the US chemical major said on Friday.

Production capacities will stand at 470,000 tonnes/year for PO (1bn lb/year) and 1m tonnes/year for TBA (2.2bn lb/year).

The plant, which is expected to come on stream in 2021, will create 160 jobs in the Houston area. Construction will employ around 2,500.

The company said this investment was the largest it had undertaken in its history.

LyondellBasell said the all front end engineering design (FEED) works had already been completed and all environmental permits received, which had facilitated the start of preparation for the actual construction work, expected to start in the second half of 2018.

“Final site selection is contingent upon final approval of certain economic incentives by the state of Texas,” added the company, however.

The final production capacities expected for the plant stand slightly higher than those suggested by the company’s CEO Bob Patel in an interview with ICIS in April.

PO is used in the manufacture of bedding, furniture, carpeting, coatings, building materials and adhesives, while the TBA produced will be converted to two ether-based oxyfuels: methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE), high-octane gasoline components which can reduce emissions from combustion engines.

The company said it would aim to sell the PO and its derivatives both domestically and internationally, while most of the oxyfuels produced will be exported via the Houston Channel to Latin America and Asia.

However, the US-strong automobile sector could absorb some of the TBA, added LyondellBasell, as high purity isobutylene which has the tyres and lubricants sectors as end markets.

“Our investment in this plant combines the best of both worlds: our leading PO/TBA process technology with proximity to low-cost feedstocks, which gives LyondellBasell a competitive advantage in the global marketplace for these products,” said Patel (pictured right) on Friday.

The company said the TBA converted into oxyfuels would be aimed to serve its own Bayport Complex near Pasadena, also in Texas.

LyondellBasell said the $2.4bn investment announced on Friday would fall under its $5bn investment programme in the US Gulf Coast, where other large petrochemical producers have also announced significant expansion projects to take advantage of cheap gas-based feedstocks.

The firm’s Texas sites – La Porte, Channelview and Corpus Christi – have all had  investments to build new capacity or expanding existing ones.

The firm completed in January a 363,000 tonnes/year expansion at its Corpus Christi cracker, which brought the unit’s total capacity to 1.1m tonnes/year. This expansion increased the company’s total ethylene capacity in the US by 900,000 tonnes/year.

Construction of a polyethylene (PE) plant at LyondellBasell’s La Porte site is underway, with a completion date expected for 2019 and doubling the site’s annual PE production capacity to 900,000 tonnes/year (2bn lb/year).

Pictured above: aerial view of LyondellBasell’s likely location for its new PO/TBA plant in La Porte, Texas
Source: LyondellBasell