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LyondellBasell Under Fire

Bankrupt firm's plan to close facilities in Texas has neighbors in an uproar

by Alexander H. Tullo
July 20, 2009 | A version of this story appeared in Volume 87, Issue 29

Chemical companies residing near the Chocolate Bayou, Texas, operations of LyondellBasell Industries are objecting to its plans to close plants there.

The U.S. subsidiaries of LyondellBasell have been under bankruptcy protection since January. The company wants to permanently close an ethylene cracker in Chocolate Bayou. Lyondell also plans to shut down a high-density polyethylene (HDPE) plant about a mile and a half away.

Ineos, which owns a complex adjacent to the HDPE plant, has filed an objection to that shutdown with the U.S. bankruptcy court. Ineos says it has a right to purchase the facility, should Lyondell decide to close it, dating back to 1988, when Ineos predecessor Amoco sold the plant to Lyondell forerunner Quantum Chemical. Ineos says Lyondell rejected its $1 million offer for the facility this spring.

Lyondell has said that the plant is no longer economical and costs $12 million per year to keep running. The court will hold a hearing on the plant's fate next month.

Separately, Lyondell's plans to close the Chocolate Bayou ethylene cracker are being challenged by Solutia and Ascend Performance Materials, the former and current owners of the site, respectively. In a filing with the bankruptcy court, the companies say Lyondell plans to abandon tanks, pipes, and sewer lines at the site in a way that "presents imminent and substantial threats to human health and safety, the other operations at the Chocolate Bayou plant, and the environment."

A Lyondell spokesman declines to elaborate on either of the complaints, noting that the company will "save that for when we respond in the court process." In a transition plan sent to Solutia earlier this month, Lyondell promised "a safe and orderly transition of the Chocolate Bayou facility."


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