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LyondellBasell Provides Construction Updates for PO/TBA Plant

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LyondellBasell Industries N.V. (LYB - Free Report) recently announced that the construction at its propylene oxide (PO) and tertiary butyl alcohol (TBA) plant is now more than 20% complete. Works at the facility are shifting to vertical assembly from foundation and infrastructure construction.

The 140-acre PO/TBA plant is currently under construction at the LyondellBasell Channelview Complex in Channelview, TX. A major milestone in terms of the project’s progress was recently highlighted by the delivery of a 25-story distillation tower, which is expected to be the tallest equipment installed.

The project promises a long-term value for investors. The company is on track to bring the world’s largest PO/TBA facility online in 2021. It may be noted that once operational, the PO/TBA plant will produce 470,000 metric tons of PO and 1 million metric tons of TBA per year.

Per a study by Greater Houston Partnership, the $2.4-billion PO/TBA project is expected to generate tax benefits worth more than $450 million for the county, community college, school district and other local taxing districts for a period of 10 years.

Moreover, the project is expected to create more than 2,200 construction jobs during the peak of construction along with 160 permanent positions.

Shares of LyondellBasell have gained 3.8% in the past year against the industry’s 20.8% decline.



LyondellBasell’s adjusted earnings came in at $2.70 per share in the third quarter that missed the Zacks Consensus Estimate of $2.78.

The company continued to benefit from low-cost natural gas liquid feedstocks with favorable prices continuing into October 2019. The company expects to witness seasonal softening of demand for the rest of 2019.

LyondellBasell expects profitability at its Houston refinery to improve during the fourth quarter. Per the company, the upside is likely to be driven by an increase in demand for low-sulfur marine fuels ahead of the IMO 2020 regulation deadline.

Zacks Rank & Stocks to Consider

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd , Franco-Nevada Corporation (FNV - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 154.4% in the past year.

Franco-Nevada has projected earnings growth rate of 44.9% for 2019. The company’s shares have rallied 46.8% in a year.

Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 65.4% in the past year.

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