Chevron Phillips Chemical Announces Sale of Puerto Rico Core Facility
GUAYAMA, PUERTO RICO (August 28, 2008) - Chevron Phillips Chemical Puerto Rico Core LLC (Puerto Rico Core), an indirect, wholly-owned subsidiary of Chevron Phillips Chemical Company LLC (Chevron Phillips Chemical), today announced that it entered an agreement to sell substantially all of its Puerto Rico Core's Guayama, Puerto Rico, facility assets to Louisiana Chemical Equipment Company, LP and Louisiana Chemical Dismantling Company, Inc., which will dismantle and salvage those assets. A desire to consolidate production into Chevron Phillips Chemical's existing Pascagoula facility, as well as high operating costs and low product price margins led to the decision to permanently discontinue operations at the plant.
Decommissioning of the plant is expected to begin next month, which will include selling the remaining product and cleaning equipment prior to dismantlement. Puerto Rico Core is cooperating with all appropriate government agencies to ensure a smooth transition.
There are presently 77 employees and 31 independent contractors working at the site. Three phased workforce reductions are planned. The initial phase is expected to occur by the end of October 2008, followed by another workforce reduction at the end of September 2009, and a final reduction at the end of September 2010 when the dismantlement effort is complete. This timeline may change as more definitive schedules are developed.
Puerto Rico Core intends to provide severance benefits to employees working at the site. Medical benefits payments are expected to be funded by Puerto Rico Core for two months after each of the workforce reductions occur. Qualified employees may apply for open positions elsewhere with Chevron Phillips Chemical affiliates.
"We appreciate the dedication of our employees and contractors at the plant and the support we have received from the community of Guayama," said Plant Manager Harry Lockhart. "We pursued several alternatives before getting to this point, but moving forward with the sale and dismantlement is the best option."
About Puerto Rico Core
The Puerto Rico Core facility, located in Guayama, on the southeast coast of Puerto Rico, has been in operation since 1967. In recent years, the plant has been operated in "campaign mode," producing paraxylene only when product margins were favorable. Paraxylene is primarily used as a raw material in the manufacture of polyester.
About Chevron Phillips Chemical Company LLC
Chevron Phillips Chemical Company LLC is one of the world's top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, plastic piping, and polymer resins. The LLC and its affiliates employ over 5,300 people at 37 manufacturing and research facilities, located in nine countries. Chevron Phillips Chemical Company LLC is equally owned by Chevron Corporation and ConocoPhillips, and is headquartered in The Woodlands, Texas. For more information about Chevron Phillips Chemical, visit www.cpchem.com.