Eastman Chemical to end Texas gas project

AP News
Posted: Dec 09, 2009 5:56 PM

Eastman Chemical Co. said Wednesday it will halt its industrial gasification project in Beaumont, Texas, because of its high cost and other factors.

The company, which makes chemicals, plastics and fibers used in products ranging from paint to furniture, said it will take a pretax noncash charge of between $150 million and $180 million in the fourth quarter as a result.

In addition to high costs, the company cited a smaller spread between natural gas and oil and petroleum coke prices, and it said continued uncertainty regarding U.S. energy and environmental policy led to the move.

But it did not close every door.

"Even though it is no longer advantageous for Eastman to pursue this project, we will continue to explore global industrial gasification opportunities as a long-term growth option for the company," President and CEO Jim Rogers said in a statement.

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Eastman shares closed at $59.23 Wednesday, up 53 cents, or 1.7 percent. They didn't change in trading after hours.