LyondellBasell Industries N.V. (NYSE: LYB) (“LyondellBasell”)
and Enterprise Products Partners L.P. (NYSE: EPD) (“Enterprise”)
today announced that their respective affiliates have executed
long-term contracts that support construction of Enterprise’s
second propane dehydrogenation (“PDH”) plant (“PDH 2”). PDH 2 will
have the capacity to consume up to 35,000 barrels per day (“BPD”)
of propane and produce up to 1.65 billion pounds per year of
polymer grade propylene (“PGP”). PDH 2 will be located at
Enterprise’s complex in the Mont Belvieu, Texas area. The facility
is scheduled to begin service in the first half of 2023.
“For nearly 30 years, Enterprise has proven to be a capable,
reliable partner for LyondellBasell,” said Bob Patel, chief
executive officer of LyondellBasell. “As we aim to meet the growing
demand for our products, ensuring a long-term supply of feedstock
is critical. These agreements allow us to leverage Enterprise’s
construction expertise, operating experience and robust network as
we continue to deliver an outstanding value proposition for our
customers.”
“We are very pleased to enter into these agreements to further
expand our already extensive relationship with LyondellBasell,”
said A.J. “Jim” Teague, chief executive officer of Enterprise’s
general partner. “PGP is a primary petrochemical that can be
converted into hundreds of products that improve the daily lives of
people around the world. Demand growth for these propylene-based
products is strong and PDH 2 will provide cost-advantaged supply
assurance to our customers, enabling expansion of their downstream
businesses to satisfy this global demand.”
Enterprise has licensed Honeywell UOP’s Oleflex propane process
to produce PGP. Enterprise has over 25 years of experience with
this technology. The company’s existing isobutane dehydrogenation
(“iBDH”) plant, which uses the Oleflex butane process, commenced
operations in 1993. The partnership is currently building a second
iBDH facility utilizing the same process, which is expected to be
completed later this year and is on time and on budget.
Enterprise has negotiated terms for a fixed-cost Engineering,
Procurement and Construction contract with S&B Engineers and
Constructors, Ltd. (“S&B”) to build PDH 2. Enterprise’s
experience with S&B dates back to 1995. S&B-led
construction projects for Enterprise include nine natural gas
liquid (“NGL”) fractionators and certain deisobutanizers at Mont
Belvieu, the Hobbs NGL fractionator, and the partnership’s ethane
export facility on the Houston Ship Channel.
Teague added, “With the combination of LyondellBasell as an
anchor customer, our use of UOP’s Oleflex technology and S&B
providing engineering and construction services, I am highly
confident of a successful project that will grow Enterprise’s cash
flow per unit and enhance the value of our partnership.”
Enterprise began its fee-based midstream petrochemical service
business with the development of its first propylene fractionator
in 1978. PDH 2 is being developed with this same fee-based model.
These anchor contracts are service-based under which Enterprise
processes LyondellBasell-provided propane to PGP for a fixed fee.
This fee-based model leverages Enterprise’s integrated value chain
by providing sourcing and storage from Enterprise’s NGL storage
facilities in Mont Belvieu, and delivers PGP into its open market
storage hub and growing network of PGP pipeline infrastructure.
Enterprise’s network of PGP assets includes more than 300 miles of
delivery pipelines, 26 PGP connections, more than five million
barrels of storage capacity, and an export terminal on the Houston
Ship Channel. Enterprise is currently expanding PGP refrigeration
facilities at the terminal, which will enable the company to load
more than 5,000 barrels per hour of PGP, as well as co-load PGP and
LPG on very large gas carriers.
Enterprise’s Mont Belvieu NGL fractionation and storage system
supporting PDH 2 currently has 760,000 BPD of NGL fractionation
capacity, with another 300,000 BPD under construction. In addition,
these complexes have more than 100 million barrels of NGL and
petrochemical storage, providing unparalleled reliability and
flexibility. The integration of the PDH 1 and PDH 2 plants with
Enterprise’s propylene fractionation facilities provides
operational flexibility for both processes, and a combined PGP
supply of more than nine billion pounds per year.
Construction of PDH 2 is expected to provide approximately 1,500
to 2,000 jobs, which will further support economic activity in the
greater Mont Belvieu and Baytown area.
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil gathering,
transportation, storage and terminals; petrochemical and refined
products transportation, storage and terminals; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets currently include approximately 50,000 miles of pipelines;
260 million barrels of storage capacity for NGLs, crude oil,
petrochemicals and refined products; and 14 billion cubic feet of
natural gas storage capacity.
About LyondellBasell
LyondellBasell (NYSE: LYB) is one of the largest plastics,
chemicals and refining companies in the world. Driven by its
employees around the globe, LyondellBasell produces materials and
products that are key to advancing solutions to modern challenges
like enhancing food safety through lightweight and flexible
packaging, protecting the purity of water supplies through stronger
and more versatile pipes, improving the safety, comfort and fuel
efficiency of many of the cars and trucks on the road, and ensuring
the safe and effective functionality in electronics and appliances.
LyondellBasell sells products into more than 100 countries and is
the world's largest producer of polymer compounds and the largest
licensor of polyolefin technologies. In 2019, LyondellBasell was
named to Fortune magazine's list of the "World's Most Admired
Companies." More information about LyondellBasell can be found at
www.LyondellBasell.com.
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical fact, included herein that
address activities, events, developments or transactions that
Enterprise, its general partner and LyondellBasell expect, believe
or anticipate will or may occur in the future are forward-looking
statements. These forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ
materially from expectations, including required approvals by
regulatory agencies, the possibility that the anticipated benefits
from such activities, events, developments or transactions cannot
be fully realized, the possibility that costs or difficulties
related thereto will be greater than expected, the impact of
competition, and other risk factors included in Enterprise’s and
LyondellBasell’s reports filed with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of their
dates. Except as required by law, Enterprise and LyondellBasell do
not intend to update or revise their forward-looking statements,
whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20190926005256/en/
LyondellBasell Veronica Adamcik,
Media Relations (713) 309-7575
Enterprise Randy Burkhalter,
Investor Relations, (713) 381-6812 or (866) 230-0745 Rick Rainey,
Media Relations (713) 381-3635
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