Engineering News

Lyondell Announces Approval for New Chemical Facility in Ningbo, China
Tuesday February 20, 8:30 am ET

HOUSTON, Feb. 20 /PRNewswire-FirstCall/ -- Lyondell Chemical Company announced today that it and Sinopec Zhenhai Refining & Chemical Co., Ltd. (ZRCC) have received final government approval for a project to construct a world-scale propylene oxide / styrene monomer (POSM) manufacturing facility in Ningbo, China, across the Hangzhou Bay from Shanghai. The project is a partnership between Lyondell and ZRCC, and the companies expect that this plant will be one of the lowest-cost POSM plants in the world, capitalizing on Lyondell's industry-leading POSM technology, both companies' operating experience and raw materials provided by ZRCC's future olefins plant in Ningbo.

Lyondell will contribute its POSM technology and its overall operating and technical experience in exchange for a share of the propylene oxide (PO) profitability from the plant. The parties will jointly market all of the PO manufactured by the new facility. The companies expect to complete construction in 2009.

Along with Lyondell's POSM plants near Houston and Rotterdam, the Ningbo facility will top the list of the world's largest POSM assets. The new plant will have an annual design capacity of 274,000 metric tons (604 million pounds) of PO and 602,000 metric tons (1.3 billion pounds) of styrene. Lyondell estimates that worldwide demand for PO was approximately 6.5 million metric tons (14.3 billion pounds) in 2006.

"With demand for propylene oxide in China growing rapidly, this world- scale plant with its leading technology and ideal location on the eastern coast of China provides a perfect platform for Lyondell and ZRCC to serve the region," said Dan Smith, Lyondell's president and CEO. "ZRCC currently operates the largest and most efficient refinery in China, and we are pleased to be a part of a site that will soon become one of the largest integrated petrochemical complexes in the region." In November 2006, ZRCC broke ground on a new 1 million ton-per-year olefins complex on the site.

Smith added, "With this project, we are expanding our position in an important market and continuing to grow efficiently in a manner consistent with our financial strategy and commitment to debt reduction."

Lyondell is the world's PO technology leader with more than 40 years of experience. This project enhances Lyondell's presence in the Asia-Pacific region, which already includes:

* Nihon Oxirane Co., Ltd. (NOC) - In partnership with Sumitomo Chemical Co., Ltd., Lyondell's NOC joint venture manufactures and markets propylene oxide, styrene monomer and propylene glycol in Asia. The venture operates a POSM plant in Chiba, Japan. NOC also markets the PO from Sumitomo's Chiba plant and will market the PO from Sumitomo's plant in Rabigh, Saudi Arabia, which currently is under construction.

* Propylene Glycol Ethers - Shiny Chemical Industrial Co., Ltd. is constructing a propylene glycol ethers (PGE) plant in Tainan, Taiwan, based on Lyondell's technology. After start-up in the second quarter 2007, Lyondell will market and sell the products in Asia.

* Regional Imports - Lyondell is a leading marketer of styrene, monoethylene glycol (MEG), butanediol, glycol ethers and acetyls that are imported from other regions.

* TiO2 - Lyondell's Millennium Inorganic Chemicals subsidiary operates a world-scale titanium dioxide (TiO2) plant in Australia that supplies markets in Asia and around the world.

About Lyondell

Lyondell Chemical Company, headquartered in Houston, Texas, is North America's third-largest independent, publicly traded chemical company. Lyondell is a leading global manufacturer of chemicals and plastics, a refiner of heavy, high-sulfur crude oil and a significant producer of fuel products. Key products include ethylene, polyethylene, styrene, propylene, propylene oxide, titanium dioxide, gasoline, ultra low-sulfur diesel, MTBE and ETBE. Lyondell operates on five continents and employs nearly 11,000 people worldwide.

Source: Lyondell Chemical Company

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