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LyondellBasell (LYB) Delays the PO/TBA Project Construction

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LyondellBasell Industries N.V. (LYB - Free Report) announced that it will slow construction of its world-scale propylene oxide (PO) and tertiary butyl alcohol (TBA) facility. Considering the current concerns related to the coronavirus pandemic, the company is limiting non-essential activities.

Per the company, the PO/TBA site is under construction and it will be prudent to limit construction activities. It is committed to the completion of this strategic investment at low-cost and incorporating its next generation PO/TBA technology.

The PO/TBA project is more than 30% complete with ongoing installation of key equipment and towers. It has a split-facility design that will optimize synergies between two existing LyondellBasell sites. LyondellBasell is building a 140-acre PO/TBA plant at its Channelview, TX facility and a related 34-acre ethers unit at its Bayport Complex in Pasadena, TX.  Post completion, the PO/TBA facility will produce around 1 billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (1 million metric tons) of TBA per year.

Notably, LyondellBasell's decision to slow down construction is not expected to impact ongoing operations at Channelview or Bayport, which are categorized as part of the United States' critical infrastructure by the Department of Homeland Security.  

Shares of the company have lost 43.2% in the past year compared with the industry’s 52.1% decline.



Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Newmont Corporation (NEM - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Novagold Resources Inc. (NG - Free Report) , all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has an expected earnings growth rate of 97% for 2020. The company’s shares have gained 30.2% in the past year.

Franco-Nevada has an expected earnings growth rate of 24.7% for 2020. Its shares have returned 31.3% in the past year.    

Novagold has an expected earnings growth rate of 11.1% for fiscal 2020. The company’s shares have surged 89.7% in the past year.

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