Lyondell To Build World-Scale Propylene Oxide Facility

Plant in The Netherlands Scheduled to Start Up in 2003

Lyondell Chemical Co. announced that it has signed a letter of intent with ABB Lummus Global for engineering, procurement and construction of the previously announced world-scale propylene oxide (PO) facility, known as PO-11. Lyondell expects the definitive contract to be finalized within 30 days.

Lyondell and Bayer, which purchased Lyondell's worldwide polyols business and an equity interest in its US PO operations for $2.45 billion in April, are currently negotiating formation of a joint venture for the project. It will be built at the Maasvlakte site in Rotterdam, The Netherlands. The plant is expected to start-up in early 2003.

The PO-11 plant will have the capacity of producing 625 million pounds (285,000 metric tons) of PO and 1.4 billion pounds (640,000 metric tons) of styrene. The plant will use Lyondell's proprietary PO technology. Lyondell claims it will be the lowest cost PO production facility in the world.

Currently, Lyondell operates world-scale PO plants in Europe, at Botlek in Rotterdam and at Fos-sur-Mer in southern France, and in the U.S. at Channelview and Bayport, TX. The Maasvlakte site is located near Lyondell's Botlek facility.

A large portion of Lyondell's share of the PO-11 output will be used to supply feedstock for Lyondell's new butanediol (BDO) plant being built at the Botlek site and scheduled for start-up in early 2002. With annual capacity of 280 million pounds (127,000 metric tons) of BDO, this new facility will be the lowest-cost BDO plant in the world.

"We are committed to providing production capacity to serve the needs of the PO and derivatives markets, as well as our own internal requirements," said Dan F. Smith, president and CEO of Lyondell. "The markets for PO are growing rapidly. We're pleased to be moving forward with this project, which has received the approval of Lyondell's Board of Directors."

Lyondell Chemical Co., with headquarters in Houston, is the world's largest producer of propylene oxide (PO); a leading producer of other PO derivatives such as BDO (butanediol) and PGE (propylene glycol ether); and a producer of styrene monomer and MTBE as co-products of PO production.

Through its 41% interest in Equistar Chemicals LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America and a leading producer of polypropylene, ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder.

Edited by David Nakamura