LyondellBasell reports profit despite maintenance issues

Petrochemical giant LyondellBasell Industries posted a $797 million quarterly profit despite extra maintenance downtime, including a March fire at its Houston Refinery.

The Houston chemical company saw its profits fall 23 percent from the same quarter last year, but they grew 4 percent from the final quarter of 2016. LyondellBasell’s quarterly revenues of $8.4 billion actually increased from $6.7 billion at the same time last year, but operating and maintenance expanses also jumped.

The company has focused on petrochemical expansions in recent years, especially in the Houston area, and CEO Bob Patel pointed toward increased profitability on the horizon.

“With a lighter maintenance schedule ahead for LyondellBasell, we look forward to benefitting from the full availability of our global assets,” Patel said.

In January, LyondellBasell opted to take its oil refinery off the sales block after considering selling the Houston area’s fourth-largest refinery because of weakening profit margins and its seemingly odd place as the only refinery in the company’s global portfolio of chemical and plastics plants.

The company projects increased refining profit margins going forward.

LyondellBasell last year said it will build a $700 million plastics plant east of Houston, creating nearly 1,000 construction jobs and providing another boost to the region’s booming petrochemical industry.

Construction of the plant, to be located at the company’s La Porte complex, will begin soon as part of a $4 billion expansion in Texas. The plant, scheduled to be completed in 2019, will produce 1.1 billion pounds a year of polyethylene, a high-density resin used to make stronger and lighter plastics.

The company recently completed expansions of plants in La Porte and Channelview, which produce ethylene, a primarily building block of plastics derived from natural gas. That ethylene, in turn will be fed to Lyondell’s new plant to make polyethylene.

LyondellBasell also is moving ahead with plans to build its biggest project ever, a plant in Channelview to produce 900 million pounds of propylene oxide, as well as 2 billion pounds of tertiary butyl alcohol and its derivatives annually. Propylene oxide is a chemical used to make everything from antifreeze to cosmetics. The tertiary butyl alcohol is a byproduct used as a solvent to make chemicals and gasoline additives.

A final decision on whether to move ahead with that plant won’t come until later this year.

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