Flint Hills Resources Closing Their Odessa Plant in 2009

Staff Report
NewsWest 9

ODESSA - NewsWest 9 has learned from Rick Skillern, the Chairman of the Board for the Odessa Chamber of Commerce that Flint Hills Resources will shut down their Odessa Plant "by the middle of this coming year, 2009."

The plant currently employs about 395 people full-time.  Employees that stay through certain dates will be eligible for a severance package.

Flint Hills bought the former Huntsman in early 2007.

Flint Hills expects to retain a number of employees after the shutdown to continue the site's decommissioning, and some customer service positions will be retained to support operations at other Flint Hills Resources locations.

History of Odessa, Texas, Petrochemical Complex

In its 51-year history, the Flint Hills Resources polymers plant has evolved from a facility producing two chemicals to one that manufactures a diverse group of polymers key to the global plastics industry. With 13 name changes and eight owners through the years, the original complex began as the world's largest inland petrochemical plant.

W.D. Noel, an Odessa businessman, is credited with envisioning a plant that could take gases produced in local oil and gas fields and process them into chemicals for the rubber industry. Noel and other businessmen convinced El Paso Natural Gas Company to build the plant. In 1955, El Paso's extensive pipeline system was producing and transporting about 25,000 barrels of propane, butane and natural gasoline per day. With two new plants in Odessa, El Paso Products Company, a wholly owned El Paso Natural Gas subsidiary, upgraded those products into styrene and butadiene that were then sold to a local General Tire and Rubber plant.

Over the years, a number of units on the original 1,000 acres were designed, constructed and operated; some such as the ammonia plant, the nylon plant and the original styrene and butadiene plants were shut down. Today's units are capable of manufacturing ethylene and propylene monomers and specialized grades of polyethylene and polypropylene used in the global plastics industry. Employees include engineers, operations specialists, environmental, health and safety specialists and a number of personnel supporting the plant's administration and human resources functions. Total annual payroll for the plant tops $24 million.

Flint Hills Resources acquired the Odessa complex in 2007 as part of a two-phase acquisition of Huntsman Corp.'s North American base chemicals and polymers assets. The acquisition also included facilities in Peru, Ill., Marysville, Mich., and Longview and Port Arthur, Texas.

Key dates in Flint Hills Resources' Odessa, Texas, plant history

1956    El Paso Products Company formed in Odessa, Texas, as a subsidiary of El Paso Natural Gas Company
1957-58 El Paso Products Company completes construction of styrene ('57) and butadiene ('58) plants to utilize light products produced in local oil and gas fields

1960    El Paso Natural Gas announced new ethylene plant and Rexall Drug & Chemical, owned by Dart Industries, announced polyethylene plant

1961    Ethylene and polyethylene plants completed
1963    First propylene column installed; today produces ethylene and propylene
1964    Propylene and polypropylene line 1 start up
            Ammonia plant start up
1966    Start up of nylon plants
            Polyethylene autoclave reactor start up
1969    Polypropylene line 2 start up
1970    Polypropylene line 3 start up
1977    Nylon plants closed
1979    El Paso Products acquires Dart Industries' interests in Odessa complex
            Styrene plant expansion
1980    Butadiene plant closed
1981    Ammonia plant shut down
1982    Low density polyethylene production expanded
1983    Burlington Northern acquires El Paso Natural Gas; plant continues to operate as El Paso Products Company
1983-84 Investors, including group of Odessa employees, buys Odessa plant, among others; retains El Paso Products Company name

1986    Polypropylene line 2 converted to APAO
1987    Feedstock fractionator installed in olefins unit
1988    Polypropylene line 3 expanded
            El Paso Products Company acquired by Gilliam, Joseph & Littlejohn; name changed to Rexene Products Company
1992    Name changed to Rexene Corp., following emergence from Chapter 11 bankruptcy
1993    Odessa plant earns ISO 9000 certification
            APAO expansion announced
1994    APAO expansion completed

Construction begins on FPO plant

1995    Olefins plant expansion announced
            Linear low density polyethylene plant announced
1996    REXflex polymer plant started up
1997    Rexene merges with Huntsman Corp.; plant begins operating under Huntsman name
1998    Olefin expansion begins operating
            LLDPE plant begins operating
2000    FPO plant shut down
2001    Styrene plant shut down
2002    Polypropylene line 2 shut down
2007    Flint Hills Resources acquires Odessa plant, three others for about $350 million, including working capital