LyondellBasell is pressing ahead with plans to build a new plant to produce propylene oxide (PO) and tertiary butyl alcohol (TBA) in the Houston Ship Channel in Texas. Billed as the largest of its kind globally, the $2.4 billion facility at the same time represents the largest investment in the history of the company founded in 2007 with the merger of Lyondell Chemical and the BASF-Shell joint venture Basell.

Plans for the project were initially broached two years ago with a slightly smaller capacity. At that time, the chemical group said the final investment decision would be made following completion of the front-end engineering design (FEED) work. The latest plans call for capacity to produce 470,000 t/y of PO and 1 million t/y of TBA.

With FEED completed and the required environmental permits received, site preparation is now under way and construction due to begin in the second half of next year, LyondellBasell said. The timetable calls for the production units to be completed by mid-2021. Although in 2015 the group announced it had selected its Channelview site for the new plant, it now says the location is “contingent on final economic incentives offered by the state of Texas.”

The project will have a split facility design to optimize product balance and realize synergies between group sites. The associated ethers unit, which will convert TBA to ether-based oxyfuels methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE) used in  high-octane gasoline, has been announced for the Bayport complex, near Pasadena, Texas.

CEO Bob Patel said the project is a key part of LyondellBasell’s organic growth strategy, which is designed to meet rising global demand for both urethanes and cleaner-burning oxyfuels. The investment, he said, combines the Netherlands-based, Texas-managed group’s leading PO/TBA process technology with proximity to low-cost shale gas-derived feedstock, giving it a global competitive advantage.

PO and derivative products produced in the new plant are to be sold to both domestic and global customers in the polyurethanes sector, while the oxyfuels will be primarily sold to buyers in 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 automotiv tires and lubricants. The majority of the products will be exported via the Houston Ship Channel.

The project is part of LyondellBasell's previously announced expansion drive for the Texas coast over the next five years, now expected to cost $5 billion.  Ethylene capacity has already been expanded at Channelview and La Porte, and a third ethylene expansion is currently under way at Corpus Christ, part of a multi-year plan to raise annual output of the plastics feedstock by 900,000 t/y.

A new $700,000 PE plant under construction at La Porte, using the group’s Hyperzone technology, will more than double capacity at the site to 900,000 t/y when completed in 2019.

LyondellBasell’s investment plans are part of the ongoing petrochemical boom on the US Gulf Coast, cashing in on the massive exploitation of shale reserves to cheaply produce natural gas liquids. Access to foreign markets is guaranteed through the growing number of export terminals being built in the area.

According to an estimate by the American Chemistry Council, the Texas Gulf Coast accounts for about $70 billion of the $185 billion in petrochemical plants completed since 2010 or planned through 2023.