Chevron Phillips Chemical postpones petrochemical reopening in Puerto Rico

Economic conditions have forced Chevron Phillips Chemical Co. LP to postpone the reopening of its Puerto Rican benzene and cyclohexane manufacturing operations indefinitely. Chevron Phillips Chemical idled all its manufacturing operations in Puerto Rico in March 2001.

Dec 7th, 2001

By the OGJ Online Staff

HOUSTON, Dec. 7 -- Economic conditions have forced Chevron Phillips Chemical Co. LP to postpone the reopening of its Puerto Rican benzene and cyclohexane manufacturing operations indefinitely.

Chevron Phillips Chemical idled all its manufacturing operations in Puerto Rico in March. It will continue to review options to eventually restart paraxylene and orthoxylene manufacturing but will not restart them in early 2002 as previously planned.

Mike Parker, aromatics and styrenics senior vice-president, said, "We have been working to reconfigure the plant and negotiating for appropriate feedstocks in order to make this a viable operation long-term. Unfortunately, general economic conditions, and particularly the economics of manufacturing benzene and subsequently cyclohexane in Puerto Rico, have not improved, and have in fact worsened. In addition, we have been unable to secure an appropriate feedstock that will allow us to maintain a viable operation there."

Chevron Phillips will meet its contractual obligations through other production and alternate supply agreements.

Paul Aegerter, worldwide aromatics general manager, said, "... We have identified and will aggressively pursue low-cost cyclohexane capacity additions around the world.

"With respect to paraxylene, the world is vastly oversupplied during this economic downturn. A substantial amount of paraxylene capacity in North America has been idled this past year due to economic conditions. But the polyester chain remains one of the truly robust-growth petrochemicals, and we will continue to evaluate our options to eventually restart the paraxylene and orthoxylene manufacturing operations in Puerto Rico when conditions permit," he said.

The company will eliminate 120 jobs with this move.

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