LyondellBasell Industries has scaled back its U.S. expansion plans, but will continue with other major projects.
At a Sept. 24 investor event in Houston, CEO Bob Patel said that the firm would not build a new ethylene cracker or a propane dehydrogenation (PDH) propylene monomer unit with downstream capacity for polypropylene resin.
Patel said the decision is in line with LBI's renewed focus on capital discipline, where it plans to phase in organic growth projects in the next several years.
Later this year, LBI — based in Houston and Rotterdam, Netherlands — will start up a 1.1 billion-pound-per-year capacity expansion for high density polyethylene resin in La Porte, Texas. The firm also will add more than 3 billion pounds of annual capacity for other chemicals in the Houston area by the end of 2021.
Beyond 2024, LBI has potential projects on the drawing board to add another 1.1 billion pounds of HDPE, as well as 1.1 billion pounds of PP, plus 550 million pounds of capacity for ethylene feedstock in Channelview, Texas.
On Sept. 26, LBI announced that Houston-based Enterprise Products Partners LP will supply LBI with propylene from a PDH unit that Enterprise plans to build in Mont Belvieu, Texas. That plant is expected to open in 2023.
Earlier this year, LBI ended its attempt to acquire Brazilian petrochemicals giant Braskem. Concerns over feedstock supply in Brazil played a role in that decision.
In the first half of 2019, LBI's sales fell almost 11 percent to $17.8 billion when compared to the same period in 2018. The firm's profit dropped almost 37 percent to $1.82 billion in the same comparison.
On Wall Street, LBI's per-share stock price began 2019 at $83.90 and was at $88.30 in early trading Sept. 27 for a gain of more than 5 percent. The firm is one of the world's largest suppliers of PE, PP and related feedstocks, and is North America's largest plastics compounder.