Engineering News

Lyondell says could replace MTBE output by summer
Thu Jan 26, 2006 01:15 PM ET

NEW YORK, Jan 26 (Reuters) - Lyondell Chemical Co., one of the largest producers of key gasoline ingredient and suspected carcinogen MTBE, could, if necessary, switch production of the chemical to an alternative by this summer, the company's CEO said on Thursday.

Several states have banned methyl tertiary butyl ether. It makes gasoline burn cleaner but breaks down slowly and can foul water supplies. Ethanol, made mainly from corn, and some petrochemicals can be used in place of MTBE.

Demand for MTBE is slipping. The New York Mercantile Exchange, the world's largest energy market, said this week it would stop trading MTBE gasoline in 2007. The Colonial Pipeline, the largest oil products conduit in the United States, said it will soon ban gasoline with MTBE from running through some of its lines.

Lyondell could switch as soon as this summer to making other petrochemical gasoline additives such as ethyl tertiary butyl ether (ETBE). But it would rather not because it is harder to make the same amount of alternatives as MTBE.

In addition, when plants switch to making alternatives, or roll back to making MTBE, about a month's work of production can be lost, Lyondell Chief Executive Officer Dan Smith told analysts on a teleconference.

MTBE is still used in Europe and other places, and Smith said Lyondell should not be materially affected by bans in the United States because it can make alternatives and because demand for gasoline is growing.

"As crazy as it seems, what we may find ourselves doing is exporting quantities of MTBE to other parts of the world only to re-import gasoline blending components to make up the deficit," said Smith.

Source: Reuters

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