HOUSTON, Jan. 22 /PRNewswire/ -- Equistar Chemicals, LP today announced that it will discontinue production at its Port Arthur, Texas, polyethylene plant by February 28, 2001 and shut down the facility. Production units to be closed include a 240 million pounds per year high density polyethylene (HDPE) reactor and a low-density polyethylene (LDPE) reactor with annual capacity of 160 million pounds. These units, along with a 300 million pounds per year HDPE reactor mothballed in 1999, will be shut down permanently.

"Our analysis of Port Arthur concludes that the site does not have sufficient scale and operational efficiency to compete in today's environment," said Eugene R. Allspach, Equistar's president and chief operating officer. "The current level of profitability in polyolefins requires that we continue advancing our strategic plan of reshaping our business to focus and grow the assets where we have sustainable competitive advantages. In doing so, we are creating additional value to Equistar by reducing our overall cost structure and optimizing assets to position ourselves for growth."

"This has been a very difficult decision and we recognize that this adversely affects the lives of many people who have worked hard to make Port Arthur more competitive. We will work diligently to minimize the disruption to peoples' lives," Allspach said. Equistar employs about 125 people at the Port Arthur plant. All eligible employees will receive separation benefits.

The Port Arthur plant produces HDPE that is primarily used for plastic bottles in applications such as household and industrial chemicals. The LDPE is used to make films for trash can liners and various packaging applications. "We expect this shutdown to cause minimal disruption to customers as we continue to provide their needs with the same products produced at other sites," Allspach said.

"Equistar remains committed to the polyethylene markets and to providing products to our customers in the most cost effective manner. This action is a necessary step to meet that commitment and will make us a stronger company with a leading market position," Allspach said. Equistar will have an annual polyolefins capacity of 6.5 billion pounds following this shutdown.

Equistar Chemicals, LP is a joint venture among Lyondell Chemical Company, Millennium Chemicals Inc. and Occidental Petroleum Corporation and combines their olefins, polymers and oxygenated chemicals businesses. Equistar is one of the world's largest producers of ethylene, propylene and polyethylene and a leading producer of ethylene oxide, ethylene glycol, polypropylene, specialty polymers, wire and cable resins, and polyolefin powders. Equistar was formed in December 1997 and has 15 manufacturing sites located primarily along the U.S. Gulf Coast and in the Midwest. Company headquarters is in Houston, Texas.
SOURCE Equistar Chemicals, LP
CONTACT: David Harpole of Equistar Chemicals, LP, 713-652-4125