Polyethylene Markets Show Strength, Catalyst Unit Addition in Texas Planned for 1Q03 Startup

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Univation Technologies, a joint venture between ExxonMobil (NYSE: XOM) (Irving, Texas) and Dow Chemical Company (NYSE: DOW) (Midland, Michigan), is nearing completion of a new metallocene catalyst production unit addition at ExxonMobil's Mont Belvieu, Texas plant. Construction began for this estimated $17 million project earlier this year and current construction schedules plan for completion during the first quarter of 2003.

Halliburton KBR (Houston, Texas) is providing engineering and construction services for this project that will produce approximately one million pounds per year of product when completed.

Exxon Chemical and Union Carbide originally created Univation Technologies to provide metallocene catalysts for Union Carbide's Unipol process technology. Dow has continued its role in the venture after acquiring Union Carbide. ExxonMobil operates the production unit as part of its Mont Belvieu plant site. Metallocene catalysts are used in the production of polyethylene and other polymers providing a higher molecular weight than polyethylene produced by other catalysts or technology.

The polyethylene market enjoyed a very strong demand for the first half of 2002 combined with several price increases. Conditions slowed somewhat in the third quarter as inventory levels remained high and the US economy continued to appear stalled. Despite the slowed economy, further price increases are still planned for this month and producers are very optimistic about growth in 2003.

Industrialinfo.com recently updated a selected number of projects that were previously identified as having construction kick-off dates during 2003. Plastics and polymers represented approximately $600 million of the $7.1 billion in total capital dollars that will begin construction next year. Speaking at the Engineering and Construction Contracting (ECC) conference held in San Francisco on the 3rd of October, Ed Lewis, President & CEO of Industrialinfo.com commented, "The strong housing market driven from new home construction along with a healthy automotive industry will continue to drive capital investments to increase plastics and polymers. Other drivers include consumer demand for packaged food products that use high performance films and other plastic material used in packaging."