HOUSTON, March 18 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) has fortified its position as a global producer and marketer of propylene oxide (PO) by strengthening Nihon Oxirane Company, Ltd. (NOC), its 30-year joint venture with Tokyo-based Sumitomo Chemical Company, Ltd.

Lyondell and Sumitomo have agreed to transfer to NOC Sumitomo's recently completed PO manufacturing plant in Chiba, Japan. The new plant, which utilizes Sumitomo's new PO processing technology, should begin commercial operation in April and will be transferred to NOC by 2006. Until then, NOC will market the plant's production for Sumitomo. The joint venture currently operates another PO plant in Chiba that utilizes Lyondell's propylene oxide/styrene monomer (POSM) technology. Together, the two plants will have a capacity to produce approximately 400,000 tons of PO annually.

NOC will have rights to the new PO process technology in Asia and the Middle East. Lyondell also will have rights to the technology, adding a third PO technology to its commercial portfolio.

NOC also plans to license Lyondell technology to build and operate a new propylene glycol (PG) manufacturing plant in Chiba. Both Lyondell and Sumitomo will make additional changes to expand NOC's market position in Asia for PO and PG and to improve NOC's cost structure.

Effective March 31, Lyondell will sell a 10 percent share of its ownership in NOC to Sumitomo in exchange for $28 million, reducing Lyondell's ownership interest in the joint venture to 40 percent.

As a result of these efforts, NOC will be a leading producer and marketer of PO and PG throughout Asia.

Lyondell is one of the world's leading producers of PO and derivative products and the only major PO producer with manufacturing plants in North America, Europe and Asia.

Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, is a leading producer of propylene oxide (PO), propylene glycol (PG) and other PO derivatives such as butanediol (BDO) and propylene glycol ether (PGE). Lyondell also is the world's number three supplier of toluene diisocyanate (TDI) and a producer of styrene monomer and MTBE as co-products of PO production. Through its 70.5% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America, as well as a leading producer of polypropylene, ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of the largest refiners in the United States, processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel.

The statements in this release relating to matters that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: the cyclical nature of the chemical and refining industries; global economic conditions; industry production capacity and operating rates; the supply/demand balance for Lyondell's and its joint ventures' products; competitive products and pricing pressures; availability, cost and volatility of raw materials and utilities; access to capital markets; governmental regulatory actions and political unrest; technological developments and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Lyondell's Annual Report on Form 10-K for the year ended December 31, 2002, filed with the Securities and Exchange Commission in March 2003.

SOURCE Lyondell Chemical Company