DALLAS / MEXICO CITY--(BUSINESS WIRE)--Occidental
Chemical Corporation (OxyChem), a subsidiary of Occidental Petroleum
Corporation (NYSE:OXY), and Mexichem, S.A.B. de C.V. (Mexichem) today
announced the formation of a 50/50 joint venture, Ingleside Ethylene
LLC, to build a 1.2-billion-pound per year capacity ethylene cracker at
the OxyChem plant in Ingleside, Texas, along with pipelines and storage
at Markham, Texas.
As part of a long-term strategic supply relationship between the
companies, essentially all of the ethylene produced from the cracker
will be consumed in the manufacture of vinyl chloride monomer (VCM)
utilizing existing VCM capacity. VCM will be delivered to Mexichem to
produce polyvinyl chloride (PVC) and PVC piping systems.
“The ethylene cracker will strengthen the position of Mexichem by taking
advantage of competitive energy and feedstock costs in the United States
resulting from shale gas development,” said Juan Pablo del Valle
Perochena, Chairman of the Board, Mexichem.
“The high degree of integration between the two companies from the
wellhead through the use of VCM as a raw material in the manufacturing
PVC pipe will also create highly competitive assets on a global basis,”
said Chuck Anderson, President, OxyChem.
OxyChem, which will build and operate the cracker, has taken a number of
relevant steps needed to begin construction, including: completed the
front-end engineering and design; received draft permits from the Texas
Commission on Environmental Quality; and applied for U.S. Environmental
Protection Agency permits in December 2012. OxyChem expects to award the
engineering and construction contract in the fourth quarter of 2013,
with construction beginning in mid-2014 and the facilities becoming
commercially operational in the first quarter of 2017.
OxyChem is a wholly owned subsidiary of Occidental Petroleum
Corporation, one of the largest U.S. oil and gas companies, based on
equity market capitalization. OxyChem manufactures and markets basic
chemicals, vinyls and other chemicals used in water treatment, paper
production, pharmaceuticals, construction, automobile manufacturing,
soaps and disinfection products, among others. OxyChem is the No. 1
producer of VCM worldwide. OxyChem is committed to safeguarding the
environment and the health and safety of its employees and surrounding
communities. OxyChem’s Ingleside plant is one of 18 facilities the
company operates that has achieved Star Status as among the safest work
sites in the United States under the Occupational Health and Safety
Administration’s Voluntary Protection Programs.
Mexichem is a global leader in plastic piping systems and a leader in
the chemical and petrochemical industry, with more than 50 years
experience in Latin America and 33 years in the Mexican Stock Exchange.
Its stock market capitalization stands at approximately US $9.7 billion.
Mexichem exports to more than 50 countries and is present in Latin
America, North America, Europe and Asia. In 2012 it billed more than US
$4.8 billion, while EBITDA accounted for close to US $1.0 billion.
Mexichem employs more than 17 thousand people in the world. It is the
only fully integrated refrigerant gas producer in America. It is also
the largest PVC resin manufacturer in Latin America, and actively helps
countries grow with wide-ranging products in dynamically developing
sectors such as construction, housing, potable water and urban sewerage
in Mexico, United States, Europe, Asia and Latin America. For more
information about Mexichem visit www.mexichem.com
Portions of this press release contain forward-looking statements and
involve risks and uncertainties that could materially affect expected
results of operations, liquidity, cash flows and business prospects.
Factors that could cause results to differ materially include, but are
not limited to: global commodity pricing fluctuations; supply and demand
considerations for Occidental’s products; higher-than-expected costs;
not successfully completing, or any material delay of the disclosed
projects; general economic slowdowns; political conditions and events;
or litigation. Words such as “will”, “would”, “should”, “could”, “may”,
“might”, “anticipate”, “plan”, “intend”, “believe”, “expect”, “aim”,
“goal”, “target”, “objective”, “become,” “begin,” “likely” or similar
expressions that convey the prospective nature of events or outcomes
generally indicate forward-looking statements. You should not place
undue reliance on these forward-looking statements, which speak only as
of the date of this release. Unless legally required, Occidental does
not undertake any obligation to update any forward-looking statements,
as a result of new information, future events or otherwise. Material
risks that may affect Occidental’s results of operations and financial
position appear in Part 1, Item 1A “Risk Factors” of the 2012 Form 10-K.
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