NEW YORK (ICIS)—LyondellBasell is advancing plans for new petrochemical projects, mainly in the US, its CEO said on Friday.
“Our teams are moving forward with preliminary engineering, planning and analysis for these potential projects to reach final investment decisions,” said Bob Patel, CEO of LyondellBasell, on the company’s fourth-quarter earnings conference call.
The table below lists the projects underway and being discussed.
“The initial projects that emerged from our pipeline include polypropylene [PP] plants in North America and Europe, build or buy scenarios for propylene monomer to support these expansions, and an additional PE [polyethylene] plant after our second Channelview ethylene debottleneck,” he added.
With global PE demand growing at around 4%/year, the world needs 12 new world-scale high density PE (HDPE) plants from 2018-2020, whereas linear low density PE (LLDPE) and low density PE (LDPE) markets require 10 and 4 such plants, respectively, over the same period, he noted.
“We believe that our Hyperzone HDPE capacity is well timed to capture growing market demand with a projected start-up date in mid-2019,” said Patel.
In PP, global demand is growing at about 5%, he noted.
“After many years of industry capacity rationalisation and very little expansion [in PP], we’re confident that new capacity is needed in both North America and Europe,” said Patel.
The US tax reform with full expensing of certain capital expenditures (CAPEX) through 2021 is helpful to project returns, but does not change or accelerate plans for LyondellBasell, the CEO said.
“I’ve encouraged our team to think about the industrial logic – why we would build something. Tax reform might add to returns [but] it’s not the reason to undertake organic growth because it could change frankly… and the cycle is somewhat long in terms of building,” said Patel.
“From a LyondellBasell standpoint…there’s got to be solid industrial logic,” he added.
Photo by WestEnd61/REX/Shutterstock