Chemicals and polymers maker LyondellBasell Industries (LYB - Free Report) said that it has restarted its methanol plant at Channelview, Tex., in fourth-quarter 2013 to benefit from low-cost natural gas from shale formations. The facility had been out of operation since 2004 as a result of rising natural gas costs.
Methanol is used to make chemicals such as acetic acid and formaldehyde and is also utilized in products including adhesives, foams, plywood subfloors and solvents. Natural gas is a key feedstock for producing methanol.
LyondellBasell said that the restart of the methanol facility represents first in a number of U.S. Gulf Coast projects to leverage the natural gas price advantage. This project along with the company’s other major debottleneck projects will bring in new capacity at considerably lower cost than building new facilities.
LyondellBasell’s other growth projects include expansions of ethylene capacity at La Porte, Channelview and Corpus Christi, Tex., which will add 1.8 billion pounds to its annual capacity, and the expansion of a polyethylene facility in Matagorda County, Tex.
LyondellBasell is a prominent plastics, chemical and refining company. Its products and technologies are used to make items that improve the quality of life for people across the globe including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.
LyondellBasell posted its third-quarter 2013 results in Oct 2013. Its earnings from continuing operations of $1.51 per share improved from $1.47 per share recorded a year ago, but missed the Zacks Consensus Estimate of $1.59.
Revenues edged down roughly 1% year over year to $11,152 million as gains in olefins and polyolefins businesses were masked by declines across intermediates and derivatives and refining units. It missed the Zacks Consensus Estimate of $11,440 million.
LyondellBasell expects that factors that aided its results in the third quarter will remain in place in the fourth as well. The company has historically seen lower margin in products such as oxyfuels in winter months and sluggish polyolefin revenues around the holiday season.
LyondellBasell, which remains challenged by a weak European market, continues to progress with its expansion projects that are expected to contribute to its earnings.
LyondellBasell currently carries a Zacks Rank #2 (Buy).
Other companies in the chemical industry worth considering are Johnson Matthey plc (JMPLY - Free Report) , PPG Industries Inc. (PPG - Free Report) and Olin Corp. (OLN - Free Report) . While Johnson Matthey carries a Zacks Rank #1 (Strong Buy), both PPG Industries and Olin retain a Zacks Rank #2 (Buy).