THE WOODLANDS, TEXAS (May 17, 2007) – Chevron Phillips Chemical Company LP (Chevron Phillips Chemical) recently approved a multi-million dollar project to increase its storage-in-transit (SIT) capacity for an additional 2,000 railcars at three plants to improve its rail efficiencies and customer delivery times for plastic resins.

The project includes an increase in capacity of an additional 750 SIT railcars at its Cedar Bayou Plant in Baytown, Texas, and 250 railcars at the Orange Chemical Plant in Orange, Texas, which will both store loaded polyethylene hopper cars.  Negotiations are underway to increase its SIT capacity for an additional 1,000 railcars at Chevron Phillips Chemical’s Pasadena Plastics Complex in Pasadena, Texas.  These railcars are used for transporting polyethylene, polypropylene, and K-Resin® styrene-butadiene copolymer (SBC). 

“Chevron Phillips Chemical wants to continue being the preferred supplier of polyethylene in North America,” said Mark Haney, vice president of polyethylene for Chevron Phillips Chemical.  “This project will dramatically improve our ability to deliver product to our customers.”

“By expanding the rail infrastructure in the area, we help alleviate the current strain on the railroads and also gain more control over our shipments,” said John Barrett, manager of business services for Chevron Phillips Chemical.  “Presently our loaded hopper cars are stored at an off-site location owned by the railroad companies until they are sent to our customers, which adds unnecessary rail traffic to the area.  With a significant portion of our North American capacity in this area, adding these on-site storage-in-transit spots will reduce the current rail congestion,” Barrett added.

According to the Association of American Railroads, freight rail traffic density has grown over 205 percent since 1980.  This exponential growth has strained the existing rail infrastructure, resulting in large areas of congestion.  Furthermore, rail shipments are expected to grow by 70 percent between 2007 and 2020.

“There simply has not been enough rail tracks, rail switching yards or railcar storage yards built in this part of the country to keep up with the needs of the rail shippers who rely upon rail transportation,” said Barrett.

“The addition of storage-in-transit capacity at our Gulf Coast polyethylene facilities enables us to better manage our overall logistics in regard to rail freight,” said Haney.  “We expect to increase our direct shipments to 100 percent, which in turn will shorten our standard delivery times by three to eight days,” Haney added.

Construction began in March 2007 at the Cedar Bayou and Orange facilities and is slated to begin in May 2007 at the Pasadena Plastics Complex.  Construction is expected to continue through the end of 2008. The project will be managed by Chevron Phillips Chemical’s corporate project engineering group assisted by TranSystems Corporation Consultants.  Harbour Contractors, Inc. is the construction contractor.