Oxy’s Ingleside cracker expected to start up in the first quarter of 2017

Construction of Occidental Petroleum’s (Oxy; Houston, Texas) Ingleside ethylene cracker is nearly complete and is expected to start up this quarter, the company said during an analyst call to discuss its latest results. The project is a 50-50 joint venture with Mexichem. Oxy anticipates pre-tax earnings of $150 million for the first quarter, supported by continued strength in caustic soda prices, partly offset by higher energy and ethylene costs affecting its margins. The company expects that higher caustic soda prices, the start-up of the joint venture ethylene cracker, and lower capital spending will result in a $400-million free cash flow increase in its chemical's business for the whole of 2017. Separately, Oxy reports fourth-quarter pre-tax earnings in its chemical segment, OxyChem, of $152 million, up 30% year-over-year (YOY). Oxy attributes the result to higher prices for caustic soda and vinyls and higher sales volumes for chlorine and vinyls, partially offset by higher ethylene and energy prices. Earnings in the year-ago quarter, excluding a one-time impairment charge of $121 million, totaled $117 million. Pre-tax earnings in Oxy’s oil and gas segment totaled $17 million, while the midstream and marketing segment turned in a loss of $48 million.