Chemical giant touts $2B expansion
LyondellBasell’s Ship Channel plant to be largest of its kind in the world
The Houston petrochemical company LyondellBasell said it will move forward with its most expensive project ever, a $2.4 billion plant near the Houston Ship Channel that would become the largest factory of its kind in the world.
The project, which would create some 2,500 construction jobs and 160 permanent positions at the plant, represents a continuation of the petrochemical boom along the Gulf Coast fueled by cheap and ample natural gas liquids and supported by access to foreign markets through the growing export terminals at the Port of Houston and other Texas ports. The American Chemistry Council, a trade group, estimated the Texas Gulf Coast accounts for about $70 billion of the $185 billion in petrochemical plants completed since 2010 or planned through 2023.
The Houston area today boasts one of the world’s greatest concentrations of petrochemical plants, in many ways the result of the shale-drilling boom that produced large amounts of natural gas liquids — primarily ethane— which provide the feedstock for most modern chemicals, including plastics. The rapid growth of the sector, which created tens of thousands of construction jobs and
thousands of permanent positions, helped the region weather the worst oil bust in generations and avoid the broader economic collapse that battered the area in the 1980s.
The industry’s expansion has slowed as projects have been completed, but it continues to attract investment from some of the world’s biggest companies. Exxon Mobil, Chevron Phillips Chemical and Dow Chemical are building modern plastics expansions near Houston in Mont Belvieu, Old Ocean and Freeport, respectively.
LyondellBasell’s latest expansion, said Bob Harvey, president and CEO of the Greater Houston Partnership, solidifies “Houston’s position as a global hub of petrochemical manufacturing, leveraging Houston’s strategic access to the Americas and top markets around the world.”
The new LyondellBasell plant will make propylene oxide, which is used to make bedding, carpeting, coatings, building materials and adhesives, and the by-product tertiary butyl alcohol, which is refined into an additive that makes fuels burn cleaner. The plant will have the biggest production capacity in the world for these chemicals, capable of manufacturing 1 billion pounds of propylene oxide and 2.2 billion pounds of tertiary butyl alcohol a year.
As part of the project, the company will build a plant to refine tertiary butyl alcohol into fuel additives. Construction on the project is slated to begin next year, with completion scheduled for 2021.
LyondellBasell planned this project awhile ago but stopped short of authorizing to allow other local expansions to begin first. In May, for example, LyondellBasell started construction on a $700 million plant in La Porte to churn out thinner, more durable and less environmentally harmful versions of the world’s most common plastic, polyethylene. The facility should come online in 2019.
The ethane from Texas’ shale gas is used to make the chemical ethylene. Ethylene is converted into pellet form and either consumed domestically or exported to Asia and Europe.
In the last few years, LyondellBasell also has completed ethylene expansions at its Channelview, La Porte and Corpus Christi sites, as well as a plastics expansion in Matagorda.