LyondellBasell begins construction of the world’s largest PO/TBA plant

LyondellBasell, one of the world’s largest plastics, chemicals and refining companies, officially broke ground on 22 August on what will be the largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant ever built.

The Houston area project is estimated to cost USD 2.4 billion, representing the single-largest capital investment in the company’s history. Once in operation, the plant will produce one billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (one million metric tons) of TBA annually. Startup of the plant is planned for 2021.

“Today’s groundbreaking is a historic moment for our company,” said Bob Patel, CEO of LyondellBasell. “This plant will be the largest of its kind, built to meet the rising global demand for urethanes used by billions of consumers each day and clean-burning oxyfuels that will help improve air quality around the world. The construction of this project will provide jobs for our neighbors, support local businesses and strengthen our communities with increased tax revenues across the greater Houston region. As one of the cornerstones of our global growth strategy, the new plant will strengthen our ties in Houston and generate long-term value for our shareholders.”

To optimize product balances and realize synergies between LyondellBasell sites, two facilities will be constructed on existing manufacturing sites. The 140-acre PO/TBA plant will be built at the LyondellBasell Channelview Complex located in Channelview, Texas, U.S.A., while an associated 34-acre ethers unit, which will convert TBA to oxyfuels, will be built at the company’s Bayport Complex in Pasadena, Texas, U.S.A.

The company chose to build the new plant at these existing locations along the Texas Gulf Coast because of their proximity to low-cost feedstocks and the transportation infrastructure needed to ship products to markets around the globe.

“The groundbreaking on this new project not only brings more job opportunities for Texans, it also adds to the growing diversity of our booming economy,” said Texas Governor Greg Abbott. “It is because of investments from companies like LyondellBasell that the Texas economy continues to be the envy of the nation. I thank LyondellBasell for their investment and wish them continued success.”

Based on an analysis by the Greater Houston Partnership, LyondellBasell’s PO/TBA project is estimated to generate more than USD 453 million in tax benefits for the county, school district, community college and other local taxing districts over a 10-year period.

The project will create more than 2,200 construction jobs at the peak of construction and 160 permanent positions.

Built to meet global demand
PO is used to make bedding, furniture, carpeting, coatings, building materials and adhesives, while TBA will be converted to two ether-based oxyfuels, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE). Both MTBE and ETBE are high-octane gasoline components that help gasoline burn cleaner and reduce emissions from automobiles.

Global demand for urethanes is projected to grow by 4 to 5% over the next five years due to emerging economies in Asia and India and their increased demand for consumer products. The global TBA market is expected to increase by 3% annually between 2018 and 2028, as drivers and governments in Asia Pacific and Latin America seek to improve air quality with cleaner-burning gasoline.

LyondellBasell plans to sell the PO and derivative products to both domestic and global customers, while the oxyfuels will be primarily sold into Latin America and Asia. A portion of the TBA will remain in the domestic market in the form of high purity isobutylene, which is used in tires and lubricants. The majority of the products will be exported via the Houston Ship Channel.

Company growth
The PO/TBA project is part of LyondellBasell’s USD 5 billion organic growth program taking place on the U.S. Gulf Coast. LyondellBasell recently completed ethylene expansion projects at the company’s La Porte, Channelview and Corpus Christi sites in Texas, U.S.A., finalizing a multi-year plan to increase annual ethylene capacity in the U.S. by two billion pounds (900,000 metric tons). Additionally, LyondellBasell is currently constructing a world-scale polyethylene (PE) plant at its La Porte Complex, which utilizes the company’s proprietary Hyperzone PE technology and will more than double that site’s PE capacity to two billion pounds (900,000 metric tons) per year.

LyondellBasell sells products in more than 100 countries and is the world’s largest producer of polypropylene compounds and the largest licensor of polyolefin technologies.