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LyondellBasell Lauds Shale, Will Expand Ethylene Capacity

LyondellBasell Industries, a worldwide chemical company based in the Netherlands, said it hopes to join other manufacturers in taking advantage of the abundance of natural gas and natural gas liquids (NGL) produced from shale formations as it begins construction this month on the first of several projects to expand ethylene capacity in the United States by about 20%.

The Dutch company said Wednesday it will expand its cracker at Corpus Christi, TX, adding 800 million pounds per year of ethylene capacity. Construction is scheduled to begin in 2014 and be completed by 2015.

"The availability of abundant supplies of natural gas and NGLs from shale deposits is creating a tremendous advantage for U.S. manufacturers, and LyondellBasell is well positioned to seize this opportunity at our Gulf Coast and Midwest facilities," CEO Jim Gallogly told investors on Wednesday.

Gallogly added that the company's strategy of expanding its existing facilities in the United States "will add the capacity equivalent to a large existing cracker, be on stream earlier, and avoid the higher costs of constructing a new grassroots plant."

LyondellBasell currently has six crackers in the United States with an annual capacity of 9.8 billion pounds. The facilities are located in Corpus Christi, Channelview, La Porte and Victoria, TX, Morris, IL, and Clinton, IA.

The company said the expansion of its cracker in La Porte is scheduled to begin later this month and will be completed in 2014. That expansion will also add 800 million pounds per year of ethylene capacity. A third project to add 250 million pounds per year of ethylene capacity at the Channelview cracker is scheduled to be completed by 2015.

LyondellBasell said it plans to configure its six crackers in the United States to run on 100% domestically produced feedstocks, up to 90% of which would be NGLs, including ethane.

The company said it has begun the process of restarting a 260 million gallon per year methanol plant at Channelview, a project expected to be completed during 4Q2013. LyondellBasell also said the ongoing retrofit at its refinery in Houston would expand processing capacity and allow it to accept up to 50% light domestic crude oil and about 175,000 b/d of heavy Canadian crude oil.

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