CPChem to shut down process units at Port Arthur facility, cut workforce

By OGJ editors
HOUSTON, June 12 -- Chevron Phillips Chemical Co. LP (CPChem) reported plans to shut down two process units—the cumene unit and the UDEX benzene extraction unit—at its Port Arthur, Tex., facility by yearend.

Interest in CPChem is held equally by ChevronTexaco Corp. and ConocoPhillips.

As a result of the closures, CPChem said that it plans to reorganize the Port Arthur facility and reduce its workforce of 254 employees by 25-30%. The company said that it is currently evaluating options for the affected employees, including redeployment within the company or the distribution of severance packages.

The company said that operations will continue at its olefins complex as well as the existing cyclohexane unit at the facility. In addition, CPChem said that the planned construction of a new cyclohexane plant at this facility will continue as planned, with startup expected early next year.

"This has been a difficult decision. We have worked closely with our business managers to consider all of our options before taking these actions," said Dick Cuneo, Port Arthur plant manager. "The benzene-extraction unit is simply not economically competitive. Also, poor market conditions for cumene made the cumene unit shutdown necessary."

The company said that it intends to "mothball" its cumene unit until market conditions improve, "at which time a restart will be considered." The closing of the units "now allows CPChem to consolidate operations and improve its cost structure, making the Port Arthur facility more competitive going forward," the company said.

"We want to assure the community that we are here for the long term. Our recent investment in the construction of the cyclohexane plant at this facility confirms the viability of this site," Cuneo added.

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