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LyondellBasell to close Chocolate Bayou olefins complex
25
Mar '09
LyondellBasell Industries will permanently close its Chocolate Bayou olefins complex near Alvin, Texas, by Aug. 4, 2009. The plant has been out of service since mid-December and the company announced on Feb. 12 plans to indefinitely idle the unit and began the process of reducing the workforce at the site.

The company has taken this action after analyzing the business case for preserving the site for future restart or permanent shutdown. The decision was made given the reduced projections for olefins demand, the limited feedstock flexibility of the site, high fixed costs due to scale and high costs related to the site service agreements. Additionally, a significant expense would have been incurred to fund a turnaround before a future restart. LyondellBasell's other six crackers in the U.S. will provide sufficient volumes to meet the need of the company's customers.

Equistar Chemicals, LP operated the Chocolate Bayou olefins unit, located on property leased to the company by Solutia. Based on current market conditions and the uncompetitive financial situation as a result of the plant lease and related agreements, LyondellBasell exercised an option under Chapter 11 to reject the site lease and to permanently shut down the unit. Those motions were granted by the U.S. Bankruptcy Court for the Southern District of New York on March 10. Equistar, along with Lyondell Chemical Company and certain other affiliates, filed for Chapter 11 bankruptcy protection on Jan. 6, 2009.

In preparation to close the facility, site personnel are developing a transition plan for the safe and efficient transfer of the site to Solutia. LyondellBasell will continue to comply with applicable state and federal environmental statutes and regulations applicable to us at the site, and will coordinate our closure activities with the Environmental Protection Agency (EPA) and Texas Commission on Environmental Quality (TCEQ).

LyondellBasell

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