HOUSTON, May 30 /PRNewswire/ -- Lyondell Chemical Company (NYSE: LYO) today announced that the company has signed a letter of intent with ABB Lummus Global for engineering, procurement and construction of the previously announced world-scale propylene oxide (PO) facility, known as PO-11. Lyondell expects the definitive contract to be finalized within 30 days.

As part of their strategic alliance, Lyondell and Bayer are in negotiations to form a joint venture for the project, which will be built at the Maasvlakte site in Rotterdam, The Netherlands. The plant is expected to start-up in early 2003.

The PO-11 plant will have the capacity of producing 625 million pounds (285,000 metric tons) of PO and 1.4 billion pounds (640,000 metric tons) of styrene. The plant will utilize Lyondell's proprietary PO technology and will be the lowest cost PO production facility in the world.

Currently, Lyondell operates world-scale PO plants in Europe, at Botlek in Rotterdam and at Fos-sur-Mer in southern France, and in the United States at Channelview and Bayport, Texas. The Maasvlakte site is located near Lyondell's Botlek facility.

A large portion of Lyondell's share of the PO-11 output will be used to supply feedstock for Lyondell's new butanediol (BDO) plant being built at the Botlek site and scheduled for start-up in early 2002. With annual capacity of 280 million pounds (127,000 metric tons) of BDO, this new facility will be the lowest cost BDO plant in the world.

"We are committed to providing production capacity to serve the needs of the PO and derivatives markets, as well as our own internal requirements," said Dan F. Smith, President and Chief Executive Officer of Lyondell. "The markets for PO are growing rapidly. We're pleased to be moving forward with this project, which has received the approval of Lyondell's Board of Directors."

Lyondell Chemical Company, with headquarters in Houston, Texas, is the world's largest producer of propylene oxide (PO); the world's number two supplier of TDI (toluene diisocyanate); a leading producer of propylene glycol; a leading producer of other PO derivatives such as BDO (butanediol) and PGE (propylene glycol ether); and a producer of styrene monomer and MTBE as co-products of PO production.

Through its 41% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America and 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.

Lyondell is the third largest methanol producer in the U.S., through its 75% interest in Lyondell Methanol Company, L.P.

The statements in this release relating to matters that are not historical facts are forward-looking statements that are subject to risks and uncertainties, including, but not limited to, future global economic conditions, industry production capacity and operating rates, the supply/demand balance for the Company's products, competitive products and pricing pressures, further increases in raw material costs, changes in governmental regulations and other risks and uncertainties detailed in the Securities and Exchange Commission filings of Lyondell.
SOURCE Lyondell Chemical Company
Web site: http: //www.lyondell.com
CONTACT: media, Jackie Wilson, 713-652-4596, or Marvin Brown, 713-309-2643, or investors, Sami Ahmad, 713-309-7141, all of Lyondell Chemical Company