LyondellBasell Industries N.V. operates as a global, independent chemical company.
The company participates globally across the petrochemical value chain and is an industry leader in many of its product lines. The company’s chemicals businesses consist primarily of large processing plants that convert large volumes of liquid and gaseous hydrocarbon feedstocks into plastic resins and other chemicals. The company’s chemical products tend to be basic building blocks for other chemicals and plastics. The company’s plastic products are used in large volumes as well as smaller specialty applications. The company’s customers use its plastics and chemicals to manufacture a wide range of products that people use in their everyday lives including food packaging, home furnishings, automotive components, paints and coatings. The company’s refining business consists of its Houston refinery, which processes crude oil into refined products, such as gasoline and distillates. The company also develops and licenses chemical and polyolefin process technologies and manufacture and sells polyolefin catalysts.
The company operates through six segments.
Olefins and Polyolefins-Americas (O&P-Americas): O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
Olefins and Polyolefins-Europe, Asia, International (O&P-EAI): O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene.
Intermediates and Derivatives (I&D): I&D segment produces and markets propylene oxide and its derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
Advanced Polymer Solutions (APS): APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.
Refining: Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.
Technology: Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Olefins and Polyolefins segments
The company is one of the leading worldwide producers of olefins and polyethylene (PE) and it is the world’s second largest producer of polypropylene (PP). The company manages its olefin and polyolefin business in two reportable segments, O&P-Americas and O&P-EAI.
Olefins & Co-products—Ethylene is the most significant petrochemical in terms of worldwide production volume and is the key building block for PE and many other chemicals and plastics. Ethylene is produced by steam cracking hydrocarbons, such as ethane, propane, butane and naphtha. This production results in co-products, such as aromatics and other olefins, including propylene and butadiene. Ethylene and its co-products are fundamental to many parts of the economy, including the production of consumer products, packaging, housing and automotive components and other durable and nondurable goods.
Polyolefins—Polyolefins, such as PE and PP are polymers derived from olefins, including ethylene and propylene. Polyolefins are the most widely used thermoplastics in the world and are found in applications and products that enhance the everyday quality of life. The company’s products are used in consumer, automotive and industrial applications ranging from food and beverage packaging to housewares and construction materials.
Polyethylene—The company produces high density polyethylene (HDPE), low density polyethylene (LDPE) and linear low-density polyethylene (LLDPE).
Polypropylene—The company produces PP homopolymers and copolymers.
Olefins and Polyolefins-Americas segment
O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
Sales and Marketing / Customers—Most of the ethylene the company produces is consumed internally as a raw material in the production of PE and other derivatives, with the balance sold to third party customers, primarily under multi-year contracts.
The company uses all the propylene it produces in the production of PP, propylene oxide and other derivatives of those products. The company also purchases propylene from third parties. In addition to purchases of propylene, it purchases ethylene for resale, when necessary, to satisfy customer demand above its own production levels. Volumes of any of these products purchased for resale can vary significantly from period to period and are typically most significant during extended outages of the company’s own production, such as during planned maintenance. However, purchased volumes have not historically had a significant impact on profits, except to the extent that they replace its lower-cost production. The company also consumes PP in its PP compounding business, which is included in its APS segment.
Most of the ethylene and propylene production from the company’s Channelview, Corpus Christi and La Porte, Texas facilities is shipped via a pipeline system, which has connections to numerous U.S. Gulf Coast consumers. This pipeline system extends from Corpus Christi to Mont Belvieu, Texas. In addition, exchange agreements with other ethylene and co-products producers allow access to customers who are not directly connected to this pipeline system. Some ethylene is shipped by railcar from the company’s Clinton, Iowa facility to its Morris, Illinois facility and some is shipped directly to customers.
The company’s PP and PE production is typically sold through its sales organization to an extensive base of established customers and distributors servicing both the domestic and export markets either under annual contracts or on a spot basis. The company has sales offices in various locations in North America and its polyolefins are primarily transported in North America by railcar or truck. Export sales are primarily to customers in Latin America, with sales to Asia expected to increase in the coming years as global supply and demand balances shift.
Joint Venture Relationships—The company has a 50% interest in Louisiana Integrated PolyEthylene JV LLC (Louisiana Joint Venture), which provides it with capacity of approximately 770 thousand tons of ethylene and 445 thousand tons of low density and linear-low density PE production per year. The company operates the joint venture assets and market the polyethylene off-take for all partners through its global sales team. The company also participates in a joint venture in Mexico, which provides it with capacity of approximately 290 thousand tons of PP production per year.
Olefins and Polyolefins-Europe, Asia, International segment
O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene.
Sales and Marketing / Customers—The company’s ethylene production is primarily consumed internally as a raw material in the production of polyolefins, and it purchases additional ethylene as needed to meet its production needs. The company’s propylene production is used as a raw material in the production of PP and propylene oxide and derivatives of those products, and it regularly purchases propylene from third parties because its internal needs exceed its internal production.
With respect to PP and PE, the company’s production is typically sold through its sales organization to an extensive base of established customers under annual contracts or on a spot basis and is also sold through distributors.
The company’s regional sales offices are in various locations, including The Netherlands, Hong Kong, China, India and the United Arab Emirates. The company also operates through a worldwide network of local sales and representative offices in Europe and Asia.
Joint Venture Relationships—The company participates in several manufacturing joint ventures in Saudi Arabia, China, Poland, South Korea, Thailand and The Netherlands. These joint ventures provide the company with additional annual production capacity of approximately 1.6 million tons of PP, approximately 1.2 million tons of olefins and approximately 770 thousand tons of PE. These capacities are based on the company’s percentage ownership interest in the joint ventures’ total capacities.
The company’s 50% joint venture in Quality Circular Polymers (QCP), located in The Netherlands, uses mechanical recycling to transform post-consumer plastic waste into high-quality polymers that can be used to make new products. The QCP plants, located in The Netherlands and Belgium, are capable of converting consumer waste into 55 thousand tons of recycled polypropylene and recycled high-density polyethylene annually.
The company generally licenses its polyolefin process technologies and supply catalysts to its joint ventures through its Technology segment.
Intermediates and Derivatives segment
I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls, and ethylene oxides and derivatives.
PO and Derivatives—The company produces PO through two distinct technologies, one of which yields tertiary butyl alcohol (TBA) as the co-product and the other of which yields SM as the co-product. The two technologies are mutually exclusive with dedicated assets for manufacturing either PO/TBA or PO/SM. PO is an intermediate commodity chemical and is a precursor of polyols, propylene glycol, propylene glycol ethers and butanediol. PO and derivatives are used in a variety of durable and consumable items with key applications such as polyurethanes used for insulation, automotive/furniture cushioning, coatings, surfactants, synthetic resins and several other household usages. The company constructed a world-scale PO/TBA plant in Houston, Texas with start-up activities on track for the first quarter of 2023. This plant has the capacity to produce 470 thousand tons of PO and 1.0 million tons of TBA per year.
Oxyfuels and Related Products—The company produces two distinct ether-based oxyfuels, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE). These oxyfuels are produced by converting the TBA co-product of PO into isobutylene and reacting with methanol or ethanol to produce either MTBE or ETBE. Both are used as high-octane gasoline components that help gasoline burn cleaner and reduce automobile emissions. Other TBA derivatives, which the company refers to as C4 chemicals, are largely used to make synthetic rubber and other gasoline additives.
Intermediate Chemicals—The company produces other commodity chemicals that utilize ethylene as a key component feedstock, including SM, acetyls and ethylene oxide derivatives. SM is utilized in various applications, such as plastics, expandable polystyrene for packaging, foam cups and containers, insulation products and durables and engineering resins. The company’s acetyls products comprise methanol, glacial acetic acid (GAA) and vinyl acetate monomer (VAM). Natural gas (methane) is the feedstock for methanol, some of which is converted to GAA, and a portion of the GAA is reacted with ethylene to create VAM. VAM is an intermediate chemical used in fabric or wood treatments, pigments, coatings, films and adhesives. Ethylene oxide is an intermediate chemical that is used to produce ethylene glycol, glycol ethers and other derivatives. Ethylene oxide and its derivatives are used in the production of polyester, antifreeze fluids, solvents and other chemical products.
Sales and Marketing / Customers—The company sells its PO and derivatives through multi-year sales and processing agreements, as well as spot sales.
The company sells its oxyfuels and related products under market and cost-based sales agreements and in the spot market. Oxyfuels are transported by barge, marine vessel and tank truck and are used as octane blending components worldwide outside of the U.S. due to their blending characteristics and emission benefits. C4 chemicals, such as high-purity isobutylene, are sold to producers of synthetic rubber and other chemical products primarily in the U.S. and Europe, and are transported by railcar, tank truck, pipeline and marine shipments.
SM is sold globally into regions, such as North America, Europe, Asia and South America export markets through spot sales and commercial contracts. Within acetyls, methanol is consumed internally to make GAA, used as a feedstock for oxyfuels and related products and also sold directly into the merchant commercial market. GAA is converted with ethylene to produce VAM which is sold worldwide under multi-year commercial contracts and on a spot basis.
Sales of the company’s PO and derivatives, oxyfuels and related products, and intermediate chemicals are made by its marketing and sales personnel, and also through distributors in the Americas, Europe, the Middle East, Africa and the Asia-Pacific region.
Joint Venture Relationships—The company has two PO joint ventures with Covestro AG, one in the U.S. and one in Europe. The company operates all production facilities for the PO joint ventures. Covestro’s interest in the U.S. PO joint ventures represents ownership of an in-kind portion of the PO production of 680 thousand tons per year. Covestro also has the right to 50% of the PO and SM production of the company’s European PO joint venture. The company’s proportional production capacity provided through this venture is approximately 160 thousand tons of PO and approximately 340 thousand tons of SM.
The company also has two joint venture manufacturing relationships in China with China Petroleum & Chemical Corporation (Sinopec). The first joint venture provides the company with production capacity of approximately 50 thousand tons of PO per year. The second joint venture, which began production in January 2022, provides the company with annual production capacity of approximately 140 thousand tons of PO and 300 thousand tons of SM. These capacities are based on the company’s operational share of the joint ventures’ total capacities. The company markets its share of the joint ventures production in the Chinese market.
Advanced Polymer Solutions segment
APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, colors and powders, engineered composites and advanced polymers, which include Catalloy and polybutene-1 polyolefin resins. In the first quarter of 2023, the company’s Catalloy and polybutene-1 products, previously reflected in its APS segment, will be transferred to and reflected in its O&P-Americas and O&P-EAI segments.
Compounding and Solutions—The company’s polypropylene compounds are produced from blends of polyolefins and additives and are largely focused on automotive applications. Engineered plastics and engineered composites add value for more specialized high-performance applications used across a variety of industries. Masterbatches are compounds that provide differentiated properties when combined with commodity plastics used in packaging, agriculture and durable goods applications. Specialty powders are largely used to mold toys, industrial tanks and sporting goods such as kayaks. Performance colors provide powdered, pelletized and liquid color concentrates for the plastics industry.
Advanced Polymers—Catalloy and polybutene-1 are unique polymers that can be used within the segment for downstream compounding or can be sold as raw materials to third parties. Catalloy is a line of differentiated propylene-based polymers that add value in packaging applications and construction materials, such as the white membranes used in the commercial roofing market. Polybutene-1 is used in both specialty piping and packaging applications.
Sales and Marketing / Customers—The company’s products are sold through its global sales organization to a broad base of established customers and distributors.
The primary products of the company’s Refining segment are refined products made from heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast. These refined products include gasoline and distillates.
Sales and Marketing / Customers—The Houston refinery’s products are primarily sold in bulk to other refiners, marketers, distributors and wholesalers at market-related prices. Most of the Houston refinery’s products are sold under contracts with a term of one year or less or are sold in the spot market. The Houston refinery’s products generally are transported to customers via pipelines and terminals owned and operated by other parties. The sales of refined products accounted for approximately 22% of the company’s consolidated revenues in 2022.
Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts. The company markets its process technologies and its polyolefin catalysts to external customers and also use them in its own manufacturing operations.
The company’s polyolefin process licenses are structured to provide a standard core technology, with individual customer needs met by adding customized modules that provide the required capabilities to produce the defined production grade slate and plant capacity. In addition to the basic license agreement, a range of services can also be provided, including project assistance, training, assistance in starting up the plant and ongoing technical support after start-up. The company may also offer marketing and sales services. In addition, licensees may continue to purchase polyolefin catalysts that are consumed in the production process, generally under long-term catalyst supply agreements with it.
Research and Development—In 2022, the company’s research and development expenditures were $124 million.
As of December 31, 2022, the company owned approximately 6,000 patents and patent applications worldwide.
LyondellBasell Industries N.V. was incorporated under Dutch law in 2009.