Chemicals and polymers maker LyondellBasell Industries (LYB - Free Report) said that its Spheripol polypropylene process technology has been chosen by Oman Oil Refineries and Petroleum Industries Company SAOC (“ORPIC”) for building a new polypropylene plant in Oman for the $3.6 billion Liwa Plastics Project (“LPP”).
LPP, the largest project of its kind in Oman, is expected to double ORPIC’s profitability by extracting more value from Omani crude and molecule of gas. Start-up of the project is expected in 2018. With the completion of the project, ORPIC is expected to produce 1.4 million metric tons of polyethylene and polypropylene annually.
The new 300 KTA (kilotons per annum) polypropylene plant will be constructed in the industrial city of Sohar. ORPIC, which is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, made the selection through a detailed bidding process.
LyondellBasell’s Spheripol process is a leading polypropylene technology for making high-quality homopolymer, random and heterophasic copolymers. The selection underscores the ability of the Spheripol process to make a vast range of high-quality products, which have been demanded by ORPIC’s clients in the Middle East and South East Asia, in a cost-effective manner.
LyondellBasell is a leading licensor of polypropylene and polyethylene technologies with over 250 polyolefin process licenses. The company is looking forward to build a strong long-term association with ORPIC.
LyondellBasell, which has emerged from Chapter 11 bankruptcy in 2010, saw its profit shoot up around 27% year over year in the second quarter of 2014 on the heels of gains across the board, especially the company’s Olefins & Polyolefins – Americas division.
LyondellBasell expects results in the third quarter to be unfavorably impacted by delayed start-up of the La Porte, TX, ethylene facility. Production of oil, natural gas and natural gas liquids (NGLs) remains strong in the U.S., which is expected to support margins going forward.
LyondellBasell is executing its expansion projects to leverage the U.S. NGLs advantage. The company’s methanol plant at Channelview, TX, along with its other major debottleneck projects (including expansion at La Porte) are expected to bring in new capacity at considerably lower cost than building new facilities.
LyondellBasell is a Zacks Rank #1 (Strong Buy) stock.
Other chemical stocks worth considering include Marrone Bio Innovations, Inc. (MBII - Free Report) , Celanese Corp. (CE - Free Report) and Johnson Matthey plc (JMPLY - Free Report) . While Marrone Bio holds a Zacks Rank #1 (Strong Buy), Celanese and Johnson Matthey retain a Zacks Rank #2 (Buy).