Bloomberg News

Lyondell Says Power Loss Shuts 2 Texas Olefin Plants

March 02, 2006

Lyondell Chemical Co. said one-third of its global capacity for making ethylene, a key plastics ingredient, was shut March 1 by a power outage that closed two olefins plants at its site in Channelview, Texas.

One plant will open this week, and a second will be shut for maintenance as long as two weeks, Houston-based Lyondell said today in a statement. The shutdown was caused by an outage at Reliant Energy Inc.'s cogeneration plant, Lyondell said. Propylene oxide production at the site was not interrupted.

The two olefins plants combined can make 3.85 billion pounds of ethylene a year, as well as propylene, butadiene and benzene, spokesman David Harpole said. Lyondell is the second- biggest producer of ethylene in North America with capacity to make 11.6 billion pounds annually. The company doesn't know whether earnings will be affected by the outage, Harpole said.

The Channelview complex covers 3,900 acres on the Gulf Coast and employs 2,000 people including contractors, according to the company's Web site.

Shares of Lyondell fell 14 cents to $20.86 at 4:07 p.m. in New York Stock Exchange composite trading. Before today, they had fallen 38 percent in the past year.

Lyondell annually can make 5 billion pounds of propylene, used in polypropylene plastics, 1.2 billion pounds of butadiene, used in synthetic rubber, and 310 million gallons of benzene, used in nylon, according to a company document.

Dow Chemical Co. is the largest ethylene maker in North America and the world.

To contact the reporter on this story: Jack Kaskey in New York at

To contact the editor responsible for this story: Steve Stroth at

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