LyondellBasell boosts US ethylene, PE expansion plans

23:41 PM | March 18, 2013 | —Robert Westervelt

LyondellBasell Industries announced plans last week to add 800 million lbs/year of ethylene capacity at its Corpus Christi, TX, site by late 2015 as part of a capital spending ramp-up that will increase its annual ethylene capacity by nearly 2 billion lbs over the next 3 years. The company also announced plans to add as much as 1.2 billion lbs/year of polyethylene (PE) in the United States by 2016 at an analyst meeting in New York last week.

“Our program of expanding current assets will add the capacity equivalent to a large existing cracker, be onstream earlier, and avoid the higher costs of constructing a grassroots plant,” says LyondellBasell CEO James Gallogly. The company’s annual capital expenditures will rise to about $1.5 billion in 2013 and 2014, up 50% from 2012 levels. Maintenance capital expenditures will remain steady, at roughly $750 million/year, so investments in discretionary expansion projects in 2013 and 2014 will triple, to about $750 million/year, from 2012 levels, he adds. The project investments are expected to add $1.5 billion/year to Ebitda by 2017 normalized for 2012 margin levels, LyondellBasell says.

The spending will increase LyondellBasell’s US ethylene capacity 18% by the end of 2015, 2–3 years before US grassroots projects announced by competitors start up, Gallogly says. LyondellBasell’s capital costs for ethylene added via debottleneck is 50 cts/lb compared with 75–80 cts/lb for greenfield ethylene construction costs. “We hope our assets will be paid for before the competition brings assets online,” Gallogly adds.

LyondellBasell said in October that it was considering expansion at Corpus Christi but did not detail capacity or timing. Capital cost of the Corpus Christi project is estimated at $430 million, says Tim Roberts, LyondellBasell senior v.p./olefins and polyolefins for the Americas.

LyondellBasell also revealed plans for a new US PE plant and to debottleneck an existing unit in the United States. Roberts says that a debottlenecking expansion will add 220 million lbs/year of PE in 2014. Capital cost for that project is estimated at $20 million. The company is also planning a new 1-billion lb/year PE plant for 2016 start-up. Capital cost for the project is estimated at $200 million/year. The company also said last week that it will invest $200 million in a natural gas liquids (NGLs) recovery unit to capture 150 million lbs/year of ethane and propane. The recovery project would be online in 2016.

“The availability of abundant supplies of natural gas and natural gas liquids from shale deposits is creating a tremendous advantage for US manufacturers, and LyondellBasell is well positioned to seize this opportunity at our Gulf Coast and Midwest facilities,” Gallogly adds.

LyondellBasell previously announced an 800-million lb/year expansion at La Porte, TX, and a 250-million lb/year ethylene expansion at Channelview, TX. Both projects are due onstream in 2015. The company will also expand its 2 Midwest US crackers by a combined 100 million lbs/year in 2013. Capital costs for the LaPorte, Channelview, and Midwest expansion projects are $545–570 million, Roberts says.

LyondellBasell is configuring its US olefins assets to run 100% domestically produced feedstocks, with up to 90% NGLs such as ethane, Gallogly says. As recently as 2009, more than half of the company’s US cracker feedstocks were imported condensates. The company completed four major maintenance turnarounds from 2010 through 2012 at US crackers where it conducted projects to upgrade logistics and expand capability to use domestic NGLs and condensates.

LyondellBasell also announced that construction has commenced on the restart of a 260-million gal/year methanol plant at Channelview. Start-up of the methanol plant is projected for fourth-quarter 2013. In Europe, a 40% expansion of butadiene capacity at Wesseling, Germany, is scheduled for completion later in 2013.

US ethylene expansions
Company Location Capacity (in millions/lbs) Start-up
Dow Chemical US Gulf Coast 4,200 2014–17
CPChem Cedar Bayou, TX 3,300 2017
Sasol Lake Charles, LA 3,300 2017
ExxonMobil Chemical Bayport, TX 3,300 2016
Braskem/Idesa Coatzacoalcos, Mexico 2,200 2015
Shell Chemical Monaca, PA 2,200 2017+
LyondellBasell Texas, US Midwest 1,950 2013-15
Formosa Point Comfort, TX 1,800 2016
OxyChem Ingleside, TX 1,200 2016
Westlake Chemical Louisiana and Kentucky 700 2013–15
Williams Partners Lake Charles, LA 600 2013
Nova Chemical Corunna, ON 500 2014+
Ineos Chocolate Bayou, TX 230 2013
Total 25,480