BP announced recently that it would close its Linear Alpha Olefin (LAO) production facility in Pasadena, Texas, by the end of 2005. The company will continue the manufacture of linear alpha olefins at its other two facilities in Alberta, Canada and Feluy, Belgium.
Closure of the Pasadena site will reduce BP’s global linear alpha olefin capacity by 500,000 tonnes (1.1 billion pounds) per year. Linear alpha olefins are used in a variety of end uses including comonomers for polyethylene, synthetic lubricants, surfactant intermediates, base oil for synthetic drilling fluids & lubricant additives.
According to George Tacquard, Senior Vice President of BP’s Global Derivatives business, the closure is the result of an extensive review of the company’s global linear alpha olefins business and prospects for the LAO industry.
“The LAO industry has faced a very difficult environment for the past few years, with overcapacity, slow demand growth, and high feedstock and energy costs. The Pasadena site is our oldest production site, and the closure of these older assets will allow our LAO business to focus resources on keeping our two newer sites at Feluy and Joffre competitive,” Tacquard said.
BP’s worldwide production capacity grew to 1.05 million tonnes (2.3 billion pounds) with the start-up of the Joffre, Alberta plant in 2001. Expansion by BP and other producers during the last several years have added over 450 thousand tonnes (1 billion pounds) of capacity, resulting in an industry overcapacity.
BP also operates a polyalphaolefin (PAO) plant in Deer Park, near the Pasadena site. Operations at this unit are not affected by the closure of the LAO unit.
After the restructuring, BP will have an annual linear alpha olefin production capability of 300,000 tonnes (660 million pounds) at Feluy, Belgium and another 250,000 tonnes (550 million pounds) at the Joffre, Alberta plant.