LyondellBasell Sets Sights on Refinery Repair, Ethylene Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas)--LyondellBasell Industries (NYSE:LYB) (Rotterdam, The Netherlands) has two big items on its to-do list for the second quarter: repair its fire-stricken refinery in Houston, Texas; and concentrate on a turnaround and expansion at its ethylene facility in Corpus Christi, Texas, according to Chief Executive Officer Bob Patel. Including these activities, Industrial Info is tracking 93 active LyondellBasell projects worth $3.59 billion.

Speaking at the company's first-quarter earnings conference call with investment analysts, Patel said he expects to see repairs completed at the Houston refinery by the end of the second quarter. The repairs will have a $40 million to $70 million impact on second-quarter earnings results, he said. A fire occurred April 8 at one of the two processing units at the 263,776 barrel-per-day (BBL/d) refinery. Patel said the facility is expected to run at 75% of capacity during the second quarter.

Meanwhile, a major turnaround at the Corpus Christi ethylene plant began earlier this month, Patel said. The 120-day turnaround has a total investment value of $60 million for just the maintenance portion. Turner Industries Group (Baton Rouge, Louisiana) is working on the turnaround, which also involves tie-ins to an 800 million pound-per-year expansion project at the facility. Patel said he expects the 800 million pound-per-year expansion to be completed in the fourth quarter this year. Industrial Info reports the expansion actually might be as much as 1.7 billion pounds per year.

LyondellBasell has said the Corpus Christi job is part of multi-plant ethylene expansion that will increase the company's annual North American capacity to 11.8 billion pounds. LyondellBasell's Channelview and La Porte plants in Texas were also part of the expansion program.

Patel also said the company is advancing plans to build the world's largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant in the Houston area. The $1 billion project would result in production of 900 million pounds per year of propylene oxide and 2 billion pounds per year of TBA. Fluor Corporation (NYSE:FLR) (Irving, Texas) is working on the detailed design. Patel said the company expects to make a final investment decision in the first half of 2017, with projected start-up in 2020.

LyondellBasell reported $1.03 billion in net income for first-quarter 2016, down 11.5% from $1.16 billion in the same quarter a year earlier. Sales and other operating revenues for the just-ended quarter totaled $6.74 billion, down 17.6% from $8.19 billion in first-quarter 2015.

The company's Olefins & Polyolefins Americas business segment saw a $100 million improvement in earnings before interest, taxes, depreciation and amortization from the fourth quarter of last year. The business segment benefited from strong polyolefin margins and demand in all global regions, Patel said. He added he expects more ethylene derivatives projects to come on line as more shale-derived ethane crackers start up in the U.S.

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