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Researched by Industrial Info Resources (Sugar Land, Texas)--LyondellBasell Industries NV (NYSE:LYB) (Rotterdam, Netherlands) is enjoying strong global demand and improving markets for its chemical products, particularly ethylene and polyethylene. A series of buildouts and proposed additions across the U.S. point to where the company believes the chemical market is headed in the years to come. Industrial Info is tracking more than $6 billion worth of projects from LyondellBasell globally, more than $4 billion of which is attributed to petrochemical projects.
LyondellBasell executives attributed much of the company's recent profit growth to growth in its propylene oxide and tertiary butyl alcohol (PO/TBA) and oxyfuels businesses. Toward the end of the year, LyondellBasell expects to finish construction and begin operations on its estimated $2.4 billion PO/TBA unit addition in Channelview, Texas, during a period of robust margins and strong market demand. The unit is designed to produce 1 billion pounds per year of PO and 2.2 billion pounds per year of TBA. Subscribers to Industrial Info's Global Market Intelligence (GMO) Chemical Processing Project Database can learn more from Industrial Info's project report.
"Propylene oxide is a core business for us, and it's one where we have a very strong position," said Kenneth Lane, the interim chief executive officer of LyondellBasell, in a quarterly earnings-related conference call. "Margins have been improving in that business, especially in the Americas. And I expect now with some of the recent announcements around the supply-side issues that we see in the industry, that's going to continue to be the case. Demand continues to be good, and it's perfect timing, frankly, for us to be starting up our PO/TBA plant later this year."
Click on the image at right for map of active LyondellBasell projects along the Texas Gulf Coast.
Michael McMurray, the chief financial officer of LyondellBasell, said in the earnings call that an increase in the company's polyethylene contract prices at the end of March helped to reverse price declines from the fourth quarter. He said the company expects polymer demand to remain strong in the second quarter, as stronger summer demand tightens markets and further strengthens LyondellBasell's margins.
LyondellBasell is considering a new polyethylene unit on the Texas Gulf Coast, which would use the company's Hyperzone PE technology to produce 600 million pounds per year of high-density polyethylene (HDPE) resin. LyondellBasell also is considering a debottlenecking of a polyethylene unit at its Matagorda Complex in Bay City, Texas, to increase capacity from the current 1.5 billion-pound-per-year output. Both proposed projects are in their early analysis phases; if approved, they would not begin construction until 2024 at the earliest. Subscribers can learn more from Industrial Info's reports on the new polyethylene unit and debottlenecking projects.
"Polyethylene demand is remarkably resilient and compounds at a fairly consistent rate of about 4%, meaningfully higher than typical GDP," McMurray said, adding that polyethylene demand is "relatively inelastic" as it is used in a wide variety of everyday products. "And with a cost advantage from shale feedstocks, U.S. polyethylene production increasingly serves a global market. We expect these resilient growth trends will continue as more people in emerging markets gain purchasing power."
LyondellBasell is preparing to begin capital upgrades at its ethylene and polyethylene plant in Morris, Illinois, in mid-2023, to improve or replace equipment that produces 1.13 billion pounds per year of ethylene, 606 million pounds per year of low-density polyethylene (LDPE) and 700 million pounds per year of linear low-density polyethylene (LLDPE). Subscribers can read more in Industrial Info's project report.
LyondellBasell announced last month it would close its 268,000-BBL/d Houston Refinery in Texas, one of the largest in the U.S., by the end of 2023 in an effort to exit its refining business. Subscribers can read more details in Industrial Info's plant profile and April 25, 2022, article - U.S. Refinery Closures, Conversions Continue.
The announced closure comes as LyondellBasell's oxyfuels and refining businesses are benefiting from increased demand for transportation fuels, as in-person activities resume and global travel recovers post-lockdown. Executives expect that favorable markets for transportation fuels will continue through next year, and the company expects to operate the refinery "at full range" through the end of 2023. Nonetheless, Lane acknowledged "operation of the refinery beyond next year would require significant capital investment. After thoroughly analyzing our options, we determined that exiting the business was the best path forward."
Lane did not offer any specifics as to what the site might be used for in the future, although he noted it "is located in a very good positioned geographically on the ship channel, and it's got great pipeline connections with our cracker in Channelview. So, there's a lot of things there that we can look at that could be valuable, in terms of circularity and some of the feedstocks that we would be using." He said it could take several years to determine what ultimately to do with the location.
Lane noted the shutdown of the Houston refinery is expected to reduce LyondellBasell's Scope 1 and 2 greenhouse gas emissions by nearly 15%.
LyondellBasell also expects to have fully closed and dismantled its ethanol plant in Tuscola, Illinois, by the end of the year, after the process began in October. Equistar Chemicals, a subsidiary of LyondellBasell, cited poor market conditions for its decision to permanently exit the synthetic ethanol business. Subscribers can read more in Industrial Info's project report.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
LyondellBasell executives attributed much of the company's recent profit growth to growth in its propylene oxide and tertiary butyl alcohol (PO/TBA) and oxyfuels businesses. Toward the end of the year, LyondellBasell expects to finish construction and begin operations on its estimated $2.4 billion PO/TBA unit addition in Channelview, Texas, during a period of robust margins and strong market demand. The unit is designed to produce 1 billion pounds per year of PO and 2.2 billion pounds per year of TBA. Subscribers to Industrial Info's Global Market Intelligence (GMO) Chemical Processing Project Database can learn more from Industrial Info's project report.
"Propylene oxide is a core business for us, and it's one where we have a very strong position," said Kenneth Lane, the interim chief executive officer of LyondellBasell, in a quarterly earnings-related conference call. "Margins have been improving in that business, especially in the Americas. And I expect now with some of the recent announcements around the supply-side issues that we see in the industry, that's going to continue to be the case. Demand continues to be good, and it's perfect timing, frankly, for us to be starting up our PO/TBA plant later this year."
Click on the image at right for map of active LyondellBasell projects along the Texas Gulf Coast.Michael McMurray, the chief financial officer of LyondellBasell, said in the earnings call that an increase in the company's polyethylene contract prices at the end of March helped to reverse price declines from the fourth quarter. He said the company expects polymer demand to remain strong in the second quarter, as stronger summer demand tightens markets and further strengthens LyondellBasell's margins.
LyondellBasell is considering a new polyethylene unit on the Texas Gulf Coast, which would use the company's Hyperzone PE technology to produce 600 million pounds per year of high-density polyethylene (HDPE) resin. LyondellBasell also is considering a debottlenecking of a polyethylene unit at its Matagorda Complex in Bay City, Texas, to increase capacity from the current 1.5 billion-pound-per-year output. Both proposed projects are in their early analysis phases; if approved, they would not begin construction until 2024 at the earliest. Subscribers can learn more from Industrial Info's reports on the new polyethylene unit and debottlenecking projects.
"Polyethylene demand is remarkably resilient and compounds at a fairly consistent rate of about 4%, meaningfully higher than typical GDP," McMurray said, adding that polyethylene demand is "relatively inelastic" as it is used in a wide variety of everyday products. "And with a cost advantage from shale feedstocks, U.S. polyethylene production increasingly serves a global market. We expect these resilient growth trends will continue as more people in emerging markets gain purchasing power."
LyondellBasell is preparing to begin capital upgrades at its ethylene and polyethylene plant in Morris, Illinois, in mid-2023, to improve or replace equipment that produces 1.13 billion pounds per year of ethylene, 606 million pounds per year of low-density polyethylene (LDPE) and 700 million pounds per year of linear low-density polyethylene (LLDPE). Subscribers can read more in Industrial Info's project report.
LyondellBasell announced last month it would close its 268,000-BBL/d Houston Refinery in Texas, one of the largest in the U.S., by the end of 2023 in an effort to exit its refining business. Subscribers can read more details in Industrial Info's plant profile and April 25, 2022, article - U.S. Refinery Closures, Conversions Continue.
The announced closure comes as LyondellBasell's oxyfuels and refining businesses are benefiting from increased demand for transportation fuels, as in-person activities resume and global travel recovers post-lockdown. Executives expect that favorable markets for transportation fuels will continue through next year, and the company expects to operate the refinery "at full range" through the end of 2023. Nonetheless, Lane acknowledged "operation of the refinery beyond next year would require significant capital investment. After thoroughly analyzing our options, we determined that exiting the business was the best path forward."
Lane did not offer any specifics as to what the site might be used for in the future, although he noted it "is located in a very good positioned geographically on the ship channel, and it's got great pipeline connections with our cracker in Channelview. So, there's a lot of things there that we can look at that could be valuable, in terms of circularity and some of the feedstocks that we would be using." He said it could take several years to determine what ultimately to do with the location.
Lane noted the shutdown of the Houston refinery is expected to reduce LyondellBasell's Scope 1 and 2 greenhouse gas emissions by nearly 15%.
LyondellBasell also expects to have fully closed and dismantled its ethanol plant in Tuscola, Illinois, by the end of the year, after the process began in October. Equistar Chemicals, a subsidiary of LyondellBasell, cited poor market conditions for its decision to permanently exit the synthetic ethanol business. Subscribers can read more in Industrial Info's project report.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
