LyondellBasell to Build $2.4 Billion Texas Plant

Once in operation, the plant is expected to produce 1 billion pounds of propylene oxide -- a chemical used in the manufacture of bedding, furniture, carpeting, coatings, building materials, and adhesives -- and 2.2 billion pounds of tertiary butyl alcohol annually.

LyondellBasell announced July 21 that it will build the world's largest plant manufacturing propylene oxide and tertiary butyl alcohol (TBA) in Channelview, Texas, an industrialized suburb of Houston. The project is estimated to cost approximately $2.4 billion, representing the single-largest capital investment in the company's history, and will be built at the LyondellBasell Channelview Complex. A related ethers unit, which will convert TBA to oxyfuels, is proposed for the company's Bayport Complex near Pasadena, Texas.

The company's announcement said at the peak of construction, the project is expected to create a maximum of 2,500 jobs -- approximately 160 permanent positions when the plant is operational.

"This world-scale project is a key part of our organic growth strategy which is designed to meet rising global demand for both urethanes and cleaner-burning oxyfuels while creating real, long-term value for our shareholders," said Bob Patel, CEO of LyondellBasell. "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."

"We are pleased that LyondellBasell continues to view the Houston area as important to their global operations, creating jobs and opportunities for Houstonians," said Bob Harvey, president and CEO of the Greater Houston Partnership. "This new project further advances Houston's position as a global hub of petrochemical manufacturing, leveraging Houston's strategic access to the Americas and top markets around the world."

Once in operation, the plant is expected to produce 1 billion pounds of propylene oxide -- a chemical used in the manufacture of bedding, furniture, carpeting, coatings, building materials, and adhesives -- and 2.2 billion pounds of TBA annually. The TBA will be converted to two ether-based oxyfuels, methyl tertiary butyl ether and ethyl tertiary butyl ether, which are high-octane gasoline components that help gasoline burn cleaner and reduce emissions from automobiles. The announcement said LyondellBasell plans to sell the PO and derivative products to domestic and global customers, while the oxyfuels will be primarily sold in Latin America and Asia. Some of the TBA will be sold domestically in the form of high-purity isobutylene, which is used in tires and lubricants.

The project is part of the company's $5 billion organic growth program taking place on the U.S. Gulf Coast.

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