New natural gas supplies have LyondellBasell considering PE expansion

By Frank Esposito
Senior Staff Reporter

Published: April 24, 2013 3:58 pm ET
Updated: April 26, 2013 10:48 am ET

Image By: LyondellBasell Industries Jim Gallogly,CEO of LyondellBasell Industries

Related to this story

Topics Materials, Materials Suppliers

HOUSTON — LyondellBasell Industries' expansion plans for North America could include more than 1.2 billion pounds of new polyethylene capacity.

At the firm's recent Investor Day event, officials described a new PE line with around 1 billion pounds of annual capacity as "possible," and also listed a 220 million pound PE debottleneck as a new project.

The new line would cost around $200 million and would be operational in 2016, officials said. The debottleneck would cost about $20 million and would come online next year. The firm — based in Rotterdam, the Netherlands, with North American headquarters in Houston — already had increased its PE capacity by 100 million pounds last year via a debottleneck at its plant in Morris, Ill.

LyondellBasell — one of the world's largest makers of PE and polypropylene — also is in the process of adding 800 million pounds of capacity for ethylene feedstock in La Porte, Texas. It has additionally announced plans to add 800 million pounds of ethylene capacity in Corpus Christi, Texas, and 250 million pounds in Channelview, Texas. The combined cost of those three projects will be more than $900 million, but officials said they could create as much as $700 million in potential growth value per year.

The potential annual growth value of LyondellBasell's PE projects could be $160 million, officials added. As with other recently announced petrochemical expansions in North America, new supplies of natural gas are pointing the way for LyondellBasell.

"The availability of abundant supplies of natural gas and natural gas liquids from shale deposits is creating a tremendous advantage for U.S. manufacturers," CEO Jim Gallogly said in a news release. "And LyondellBasell is well-positioned to seize this opportunity at our Gulf Coast and Midwest facilities."

In an April 22 phone interview, company spokesman David Harpole said that the firm "is looking at adding polyethylene capacity" in North America, but hasn't yet made a decision as to location or on the technology it would use.

He added that the new ethylene capacity being brought on by LyondellBasell "is the equivalent of a new ethylene cracker," so adding new PE capacity "would be an opportunity to utilize some of (the new ethylene) internally, and the remainder would be a growth opportunity."

The firm now is at least the eighth PE maker to announce plans for new capacity in North America, joining Chevron Phillips Chemical Co. LP, Nova Chemicals Corp., Formosa Plastics Corp. USA, Sasol Ltd., Dow Chemical Co., ExxonMobil Chemical Co. and a joint venture between Braskem SA and Grupo Idesa. According to confirmed estimates, these expansions could add more than 11 billion pounds of new PE capacity in the region.

The ranks of companies adding ethylene feedstock capacity in North America now includes LyondellBasell and at least a dozen others. Those projects could add more than 25 billion pounds of annual ethylene capacity.

Outside of North America, LyondellBasell is increasing capacity for plastic feedstock butadiene by 40 percent at its plant in Wesseling, Germany. That project is expected to be completed later this year.

LyondellBasell posted record profit of more than $2.8 billion in 2012 on sales of almost $45.4 billion. Profit for 2012 was up 32 percent vs. 2011, while the sales number was down almost six percent.

The firm's olefins and polyolefins business in the Americas saw its 2012 pretax profit soar more than 38 percent vs. 2012, as the business benefited from geographically advantaged feedstocks.

On Wall Street, LyondellBasell's per-share stock price was near $45 in mid-November but had improved to almost $60.50 in late trading April 24.


Comments

New natural gas supplies have LyondellBasell considering PE expansion

By Frank Esposito
Senior Staff Reporter

Published: April 24, 2013 3:58 pm ET
Updated: April 26, 2013 10:48 am ET

Post Your Comments


Back to story


More stories

Image

China's PVC exports face challenges

August 22, 2014 2:14 pm ET

Despite robust growth in the first half of the year, China's PVC exports now faces new challenges, due to trade barriers and new capacity ramping up...    More

Image

Recycled HDPE prices climbing

August 22, 2014 11:26 am ET

North American selling prices for recycled grades of high density polyethylene resin have increased in recent months because of tight supplies of the ...    More

Image

Investment firm specializes in emerging polymer firms in Ohio

August 21, 2014 3:20 pm ET

A plastics market veteran is working with an investment firm and a research foundation to help commercialize polymer technology in the Buckeye State.    More

Image

Bayer, SCAC partner on water reuse project

August 21, 2014 12:48 pm ET

Bayer MaterialScience (BMS) and Shanghai Chlor-Alkali Chemical Co. Ltd. (SCAC) have entered into a preliminary agreement for the reuse of waste water ...    More

Image

Automakers look under the hood for the next lightweighting opportunities

August 20, 2014 1:06 pm ET

The automotive industry's current favorite target for lightweighting efforts is the powertrain, according to a recent survey.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events