Huntsman Progresses with Construction of New Maleic Anhydride Unit and Makes Little Progress on Change of Ownership

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Researched by Industrial Info Resources (Sugar Land, Texas)--Huntsman Corporation (NYSE:HUN) (Salt Lake City, Utah) began construction last year for a new estimated $125 million maleic anhydride (MA) unit at its site in Geismar, Louisiana. This project represents the first MA unit addition in North America for many years and only the second major MA capacity expansion since the completion early last year of a 40 million-pound-per-year expansion by Lanxess Corporation (Pittsburgh, Pennsylvania) at its Baytown, Texas, MA unit. The new Huntsman unit will have an estimated capacity of 100 million pounds per year when completed. The Geismar site is operated by Rubicon LLC, a 50:50 joint venture of Huntsman and Chemtura Corporation (NYSE:CEM) (Middleton, Connecticut). The project will be built on the site of a former toluene diisocyanate unit that was demolished over two years ago, providing infrastructure and space for this new unit.

Despite slow or what appears to be no progress on the planned acquisition of Hunstman by Hexion Specialty Chemicals Incorporated (Columbus, Ohio) announced in the summer of last year, Huntsman seems to be keeping its momentum on previously planned project activity here in the states. For more information, see related article from August 1, 2007 - Huntsman Chemical Continues Strong Investment Plans Even as Ownership Changes Move Forward.

Beyond the new MA unit addition, Industrial Info is tracking an additional $75 million in potential capital and maintenance projects planned by Huntsman in the United States and Canada over the next year or more based on projects identified in its North American Project Database. The planned acquisition by Hexion has become a very slow process that appears to be making no real progress towards a conclusion. Huntsman is still pressing to complete the transaction, while Hexion is working to walk away from the deal based on evaluations that indicate the purchase might not be as attractive to them as originally anticipated.

CDI Engineering Group (Houston, Texas) has provided engineering and procurement services for the new MA unit, and Shaw Group Incorporated (Baton Rouge, Louisiana) has served as the project's construction manager. Originally planned to be complete late this year, current schedules indicate the new unit could begin operation early next year.

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