LyondellBasell Industries NV (NYSE:LYB) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Jeffrey Zekauskas – JPMorgan: In your Intermediates & Derivatives analysis, you called out competitive pressures on butanediol margins. Order of magnitude, how much EBITDA did you lose from the competitive pressure and what’s the outlook for butanediol margins going forward?
James L. Gallogly – CEO: I think the number, Jeff, was around $20 million, and the market was extremely strong. In the past, there’s been competitive pressures. And so I think we’re seeing a more normal course for now until that extra capacity is used up.
Jeffrey Zekauskas – JPMorgan: And then secondly, butadiene prices have really moved lower both in the United States and in the offshore market. Can you sort of quantify how that might affect you in the third quarter?
James L. Gallogly – CEO: Yes, the BD market has contracted some. That was particularly true in Europe, and now we’re seeing — the export arbitrage was open to the United States. We’ve seen some cargoes moving in this direction. And as a result of that, we’ll see the margins contract some. I’m happy to tell you that in the expansion project that we had at Wesseling, we put in forward pricing. We wanted to ensure that, that project had a very nice return. And so we’re going to see nice margins from that expansion despite the overall reduction and industry pricing in BD.
Robert Koort – Goldman Sachs: I was wondering if you could give us your latest assessment on the state of the propane market and sort of what you see going forward, seems like maybe we got through the first six months of this year without any real upward momentum even if the export facility is open, but I suspect that could change going forward. It’s more open, but maybe there’s enough NGL fractionation coming that it’s awash, how do you see it playing out?
James L. Gallogly – CEO: Yeah, at this point in time, the inventories of propane are coming in a little bit within somewhat historic levels. Pricing is still good for us in the crack, and so we are continuing to bring it in to our olefin numbers. Butane has been a nice surprise, been very long this summer, and that’s come into the crack as well. And I think that’s helping hold propane where it’s at. There’s going to be a need for more propane export before you see propane come in a lot. So I think we’re okay for right now. As you know, my longer term view is that propane will trade more in line with crude oil-type metrics on heating value basis, given that you can put it on a boat and transport it. And so, I’ve not been as enthusiastic about PDH units as some of our competitors.
Robert Koort – Goldman Sachs: If I might follow up, could you give us a sense what you would see – if we went to a wonderful world where it might grow at 3% or 4% a year and Europe pulls out of its recession, what is sort of an upside scenario you could paint for EBITDA from Olefins & Polyolefins in EAI?
James L. Gallogly – CEO: Well, you heard that we had increased our LPG cracking to 37% in Europe. During this time of year, we do that, but it was much better than is typical. We had some nice earnings there, and we’re able to take advantage of it. Let me give you kind of an interesting fact. At Berre now, remember, we shut the refinery down, which used to be a feed prep unit for that cracker. And over the last days, we’re only cracking about 20%, 25% naphtha in that unit, a lot more condensates, quite a bit of propane, some butane. So we’ll see how it develops over time, but we have a lot of communication between our U.S. assets and our European assets and how to get the best out of our furnaces. So, I don’t want to quantify that number today, but we’re working it very, very hard. We saw about $45 million in this last quarter from it, but we’re working hard to make that number bigger.