David Kinney - LyondellBasell Industries NV Bhavesh Vaghjibhai Patel - LyondellBasell Industries NV Thomas Aebischer - LyondellBasell Industries NV

Robert Koort - Goldman Sachs & Co. LLC Donald David Carson - Susquehanna Financial Group LLLP Arun Viswanathan - RBC Capital Markets LLC Vincent Stephen Andrews - Morgan Stanley & Co.

LLC James Sheehan - SunTrust Robinson Humphrey, Inc. David I.

Begleiter - Deutsche Bank Securities, Inc. P.J.

Juvekar - Citigroup Global Markets, Inc. Kevin W.

McCarthy - Vertical Research Partners LLC John Roberts - UBS Securities LLC Frank J. Mitsch - Wells Fargo Securities LLC Aleksey Yefremov - Nomura Instinet Hassan I.

Ahmed - Alembic Global Advisors LLC Ian Bennett - Bank of America Merrill Lynch Duffy Fischer - Barclays Capital, Inc. Jonas I.

Oxgaard - Sanford C. Bernstein & Co.

LLC Matthew Blair - Tudor, Pickering, Holt & Co. Securities, Inc.

Good morning and thank you, Michelle. Hello and welcome to LyondellBasell's third quarter 2017 teleconference.

I'm joined today by Bob Patel, our Chief Executive Officer; and Thomas Aebischer, our Chief Financial Officer. Before we begin this business discussion, I would like to point out that a slide presentation accompanies today's call and is available on our website at www.lyb.com.

I would also like for you to note that statements made in this call related to matters that are not historical facts are forward-looking statements. These forward-looking statements are based on assumptions of management, which are believed to be reasonable at the time made and are subject to significant risks and uncertainties.

Actual results could differ materially from these forward-looking statements. For more detailed information about the factors that could cause our actual results to differ materially, please refer to the cautionary statements in the presentation slides and our financial reports, which are available at www.lyb.com/investorrelations.

Reconciliations of non-GAAP financial measures to GAAP financial measures, together with any other applicable disclosures, including earnings release, are currently available on our website at www.lyb.com. Finally, I would like to point out that a recording of this call will be available by telephone beginning at 2:00 p.m.

Eastern Time today until 11:59 p.m. Eastern Time on November 27, by calling 866-448-2572 in the United States and 203-369-1168 outside the United States.

The passcode for both numbers is 2526. During today's call, we will focus on third quarter results, the current environment and near-term outlook.

With that being said, I would now like to turn the call all over to Bob.

Thanks, Dave. Good morning to all of you, and thank you for joining our third quarter earnings call.

Let's begin with slide three and review the highlights from the third quarter. Our third quarter diluted earnings per share was $2.67.

EBITDA was $1.8 billion. Our global business portfolio demonstrated continued strength with EBITDA from our Intermediates & Derivatives segment improving by more than 30% during the third quarter relative to the third quarter of 2016.

We advanced our growth strategy by opening a new polypropylene compounds plant in China, and reaching final investment decision for our next propylene oxide plant in Texas. The sale of our interest in the Geosel pipeline and storage facility in France resulted in an after-tax gain of $103 million, which impacted earnings by $0.26 per share.

We continue to execute on our financial priorities during the third quarter and Thomas will provide you with an update on this progress in a few moments. Turning to slide four, I'm pleased to report that LyondellBasell's employees and contractors continue to stay focused upon workplace safety during 2017.

Third quarter year-to-date metrics compare favorably to both industry benchmarks and our own historical performance. The value of our disciplined approach to safety was evident in the response by our workforce during Hurricane Harvey, one of the worst natural disasters in Texas' history.

Despite extensive personal, community and industrial disruption, LyondellBasell had zero major process safety incidents in the areas affected by the storm. Our team overcame difficult conditions and countless obstacles to ensure a safe and secure operations of our clients.

I'm personally grateful to our colleagues for their tremendous selflessness, dedication and sense of ownership during this event. Hurricane Harvey affected each of our nine major U.S.

Gulf Coast sites by varying degrees. Except for our La Porte ethylene cracker, all facilities were operating by the end of September.

Our La Porte cracker had an unplanned shutdown due to the storm that damaged the compressor and distillation tower. I'm pleased to report that this cracker is producing ethylene as of this morning and we will ramp up to full rates over the next days.

While we still have a few raw material allocations from suppliers, all other production units are now operating at typical rates. We estimate that lost sales volume valued at third quarter margins and additional related cost due to the storm impacted third quarter results by approximately $200 million.

Tight markets for many of our products resulted in improved margins that provided partial offsets. During the fourth quarter, we estimate that additional lost sales and expenses from the storm, primarily related to the La Porte outage will impact results by approximately $100 million.

Let's turn to slide five and review our progress towards increasing production volumes during 2017. You'll recall that during 2016.

We had an unusually-high level of plant maintenance, capacity expansions and other work that led to downtime on many of our assets. Even after the impact of Harvey, this year we have produced 13% more ethylene across our global system than in 2016.

This increased ethylene production enables us to run our downstream polyethylene and ethylene upside derivative units at higher rates. At our refinery, crude throughput is up by 21% relative to 2016 with only minimal impact from the storm.

These volume improvements are contributing to the increased EBITDA in our third quarter results. On slide six, I'd like to review typical seasonality for polyethylene demand in North America, and how the cadence of capacity additions might play out over the coming months.

Over the previous seven years, first quarter PE demand in North America improved by an average of 3%, as customers restock after depleting inventories at year-end. Demand typically stayed strong over the second quarter and steps up another 3% in the third quarter to serve increased demand for products consumed during the year-end holiday season.

Fourth quarter is typically a period of reduced demand when customers seek to minimize inventories and associated year-end taxes. This seasonal demand pattern is similar to the behavior of global markets where the 4% annual average for polyethylene demand growth is primarily focused in the first three quarters of the year.

During the fourth quarter of 2017, several of the long anticipated North American polyethylene capacity additions are becoming a reality for the market. The new capacity is likely to exceed global demand growth by a few percent, but it arrives at a time when global operating rates are very high.

With Harvey reducing inventories across the industry during the last third – 2017 and with increasing seasonal demand during the first three quarters of 2018, we believe the market is well positioned to absorb the new capacity over the next few quarters. And now Thomas will provide detail on our financial highlights.

Thank you, Bob, and good morning to all of you. On slide seven we outline our quarterly and trailing 12-months segment results.

During the third quarter Olefins & Polyolefins Americas volumes were impacted by Hurricane Harvey, while high industry operating rates compressed olefin margins due to higher feedstock costs and weaker pricing for much of the quarter. Olefins & Polyolefins EAI continue to benefit from strong demand for polymers that was impacted by reduced olefin margins, primarily due to lower co-product pricing.

Our Intermediates & Derivatives segment benefited from strong volumes and margin across most products. The refinery run well throughout the quarter and had a relatively small throughput impact during Harvey.

Strong September refining margins improved third quarter profitability relative to the second quarter and 2016 results. Overall, our profitability remained strong with $6.8 billion in EBITDA over the past 12 months.

Please turn to slide 8, which provides a picture of cash generation and use. During the third quarter, we generated approximately $1.5 billion of cash from operations and more than 40% of this amount was returned to investors through dividends and share repurchases.

Our investments in maintenance and growth capital expenses were $380 million during the third quarter, with increased spending for the Hyperzone PE and PO/TBA projects. During the third quarter, our cash and liquid investments balance increased by approximately $500 million.

Over the past 12 months, we generated $5.4 billion of cash from operations and used approximately $2.7 billion for dividends and share repurchases. Slide 9 provides a longer perspective, as well as some current financial metrics.

We finished the quarter with approximately $6 billion of liquidity and a total debt to EBITDA ratio of 1.3 times. Our share repurchase program continued during the quarter with another 3.1 million shares purchased.

Since the inception of the program, we had repurchased approximately 189 million shares, or approximately 33% of the initial shares outstanding. We continue to take a targeted approach to share repurchases as part of our capital deployment strategy.

I'm pleased to announce that on September 22, Standard & Poor's raised the rating of LyondellBasell's senior unsecured debt to BBB+ from BBB. Excluding the first quarter bond redemption charges, we continued to maintain our previous annual guidance provided in February for interest, depreciation and amortization expenses, as well as our effective tax rate.

We now estimate that our capital expenditures for 2017 will be approximately $200 million less than our initial guidance of $2 billion. I look forward to providing you with annual guidance for 2018 during our fourth quarter earnings call.

With that, thank you very much for your attention. I will now turn the call back to Bob.

Thank you.

Thank you, Thomas. Let's turn to slide 10 and review our segment results.

In our Olefins & Polyolefins-Americas segment, third quarter EBITDA was $616 million, a $243 million decline compared to the second quarter. Relative to the previous quarter, Olefins results decreased by approximately $260 million, increasing feedstock prices caused margins to decline by nearly $0.05 per pound and sales volume decline due to production losses from Hurricane Harvey.

Downtime on our Gulf Coast ethylene crackers during the storm resulted in an average ethylene operating rate of 76% for the quarter. 73% of our ethylene production was from ethane and approximately 85% came from NGLs.

In Polyolefins, combined results were relatively unchanged. Polyethylene sales were slightly higher than the second quarter, but lower than third quarter expectations due to Hurricane Harvey.

Polyethylene spreads improved approximately $0.02 per pound, but were largely offset by reduced polypropylene volumes and declining margins due to polypropylene prices lagging monomer price increases. During October, polymer markets remained firm as customers continue to restock supply chains following the hurricane.

Polymer supplies are expected to improve with higher production availability and new capacity, but ethylene inventory should continue to tighten due to planned industry maintenance and increased demand. Co-monomer availability to produce certain types of polyethylene continues to be a concern for the industry.

With the restart of our La Porte cracker this morning, no major maintenance is planned in our olefins system for the remainder of 2017. Let's turn to slide 11 and review the performance in the Olefins & Polyolefins, Europe, Asia and International segment.

During the third quarter, EBITDA was $698 million, $1 million lower than the second quarter. This includes $108 million gain from the sale of our interest in Geosel.

Olefins results declined by approximately $100 million on lower margins, primarily due to lower co-product prices. Utilization of advantaged feedstocks accounted for 53% of ethylene production and operating rates remained strong at 95%.

Combined polyolefins results declined by approximately $10 million, with volume improvements partially offset by margin declines. During October, global markets remained balanced with good demand.

Thriving naphtha prices are expected to pressure strong olefin margins. In October, we had an upset in our ethylene cracker, which required unplanned maintenance.

I'm pleased to report that the repairs are complete and the cracker is operational again. The value of lost production due to the upset is forecasted to impact the fourth quarter by approximately $40 million.

As in the U.S., no other major maintenance is planned in our European olefin system for the remainder of 2017. Now please turn to slide 12 for a discussion of our Intermediates & Derivatives segment.

Third quarter EBITDA was $402 million, an improvement of $63 million compared to the second quarter. Results for propylene oxide and derivatives improved by approximately $25 million.

Despite production losses due to Hurricane Harvey, sales volume increased due to the completion of planned maintenance in our PO/TBA plant in The Netherlands during the second quarter. Intermediate chemicals results improved by approximately $15 million as styrene margins improved.

Volumes declined for most intermediate chemicals except for an increase in methanol volumes, due to the completion of second quarter planned maintenance at our Channelview facility. Oxyfuels and related products results improved by approximately $25 million, primarily due to volume increases upon the completion of the planned maintenance in our Netherlands facility.

October volumes are improving for most Intermediates & Derivatives products with the absence of hurricane impacts on production and demand. Tighter supply due to production outages in the acetyl industry are improving margins.

In contrast, high butane prices and typical fourth quarter seasonal declines are compressing oxyfuel margins. Now let's move to slide 13 for a discussion of the refining segment.

Third quarter EBITDA was $58 million, a $33 million improvement over the prior quarter. We continuously and safely operated the refinery at reduced rates during Hurricane Harvey to minimize our losses and improved its speed of recovery after the storm.

The Maya 2-1-1 improved primarily due to stronger distillate spreads. This improvement was partially offset by weak heavy to light crude differentials on our byproduct margins.

Our technology segment continued to perform well with $47 million of EBITDA, approximately $1 million decline versus the second quarter. Turning to slide 14.

Considering the effects of Hurricane Harvey, third quarter results showed the resilience of our business portfolio. We had earnings of $2.67 per share and strong results from our Intermediates & Derivatives segment.

We continue to advance our 2,000 volume improvements with a 13% increase in ethylene production and 21% higher throughput at the refinery. Our growth initiatives continue with startup of a new plant in China and approval of our propylene oxide investment in Texas.

By generating approximately $1.5 billion in cash from operations during the quarter, we continue to deploy capital toward a balanced mix of dividends, share repurchases and organic growth. As we look toward the remainder of 2017, we continue to see firm olefin and polyolefin markets, as supply chains restock from the production loss during Hurricane Harvey.

New polyethylene capacity is aligned with seasonal demand and supportive of improved demand for ethylene monomer, while the industry awaits the startup of additional crackers during 2018. Global polymer demand remains strong.

Most Intermediates & Derivatives products are well-positioned as we enter the fourth quarter and should help balance typical seasonal weakness in oxyfuels. U.S.

Gulf Coast refining markets appear to have reset favorably after the hurricanes with strong distillate spreads and improved light to heavy differentials. We're now pleased to take your questions.

Thanks very much. Bob, I was wondering if you could talk a little bit about ethane.

Obviously, the downtime didn't tighten up the ethane market, it looks like maybe in the next 12 or 18 months we'll see ethane consumption in the industry rise about 30%. So, give us some sense what you think would happen to your ethane costs if we revisit that maybe mid of 2018 and late 2018, how much higher it could be?

Sure. Good morning, Bob.

I think part of the reason ethane prices were somewhat sticky that you can see temporary dislocations in terms of pipeline operations and so on. Our fundamental view is that we still see rejection of ethane in the range of 500,000 barrels per day and there is a lot more coming on from the Permian pipelines and fractionation capacity that's planned for next year.

So my views haven't changed in terms of $0.07 to $0.10 sort of frac margins and abundance of ethane to meet the new demand that we expect from crackers in 2018. So, we're still pretty constructive and consistent with our views.

Yes. Bob, we had tightness in polyethylene as you noted, you've had $0.07 in price increases.

What's your sense of whether we can get additional price increases here? And as this new polyethylene capacity does start up in the fourth quarter, how quickly do you think this surge in pricing can last?

Well, I still think, as I said in my prepared remarks, that markets are still relatively tight and not all of the industry has returned to unconstrained operations because of some of the comonomer lingering outages that does impact some grades of polyethylene. So my sense is that as the supply chain replenishes inventory, including our customers who likely depleted raw material and finished goods inventory, that'll probably carry us through the fourth quarter and in the first quarter as we showed in our presentation that generally we see a step up in demand seasonally in Q1 and then again in Q3.

So I think this demand pattern will likely provide for pretty balanced markets. And so we'll have to see, but I think also we're starting from even a higher price base than when we had anticipated, and higher operating rate, so I think all of that points towards pretty constructive markets.

Oh, I'm sorry. Good morning.

Thanks for taking my question. Maybe you can just discuss, I guess, what you're seeing on both ethylene side and propylene side?

You discussed that there is tightness in polyethylene but we have seen a little bit of give back on the ethylene side, and then similarly in polypropylene, you mentioned that it didn't keep up with the monomer, so maybe you can just talk a little bit about those changes as well. Thanks.

Sure, Arun. First of all in ethylene, you may have read that one of the crackers that was due to start up early next year has been pushed out due to the impacts from the storm.

And also if you look ahead into the spring season, the turnaround season looks to be heavier than average, and certainly the planned maintenance looks like it's going to be more than the spring of 2016, so we see that further tightening ethylene going into next year. So we're pretty constructive on ethylene through first half of next year.

And the timing of ethylene and polyethylene price increases that's really just sort of small sort of market movements over time. But I think ethylene is going to be pretty constructive through certainly the middle of next year until the last of large crackers starts up in this sort of series of start-ups that are coming.

On propylene, what I had mentioned in my prepared remarks is really that generally propylene prices tend to lag by about a month. And so I think it's very normal the lag that we're seeing, but if we kind of step back, we still think polypropylene is very, very tight.

There's not really any new capacity planned and demand is growing year-over-year. So, we're pretty constructive about polypropylene for some time frankly because there's not really any new greenfield capacity coming for another couple of years.

Thank you. Just a question, I think it was like this call a year ago that sort of there was more talk about inorganic growth and M&A and obviously years now passed and nothing's happened.

So, I know you can't be specific, but maybe at a high level, could you just sort of give us a postmortem on the last 12 months? And why hasn't anything happened, is it the bid-ask spreads are too high that you're not seeing the assets that you're interested in?

And just any updated thoughts there would be helpful.

Yeah, good morning. So since our Investor Day, when we sort of presented our strategy and how we thought about inorganic growth, frankly, our strategic priorities did remain consistent, they haven't changed.

We laid out our objectives, we laid out sort of the value chains in which we would find interest and we continue to be thoughtful and disciplined and our focus is on value creation. So my view is that not a whole lot has changed, and I don't think we expected in April that something was imminent and as the quarters have played out, that's been the case.

So, we're going to be opportunistic, that's a very nature of inorganic growth and be focused on value creation and leverage our strengths.

Thanks. You mentioned acetic acid prices were going up and I know you've got some announcements out there in the market.

Can you talk about the cadence of acetic acid price increases and how that might impact profitability for Intermediates & Derivatives?

Yeah. I think in the near-term, markets are a little bit tighter partly because of unplanned outages and we think that the market will be more balanced post all of this sort of settling out.

And as you rightly mentioned, there is some more capacity coming, but likely that could moderate business conditions further in that value chain. I think the recent move up has been more because of the unplanned outages, whether it's there because of hurricanes or elsewhere due to mechanical issues.

Thank you. Bob, when these crackers do come on-stream middle of next year and maybe even the back half of next year, how do you think margins will at least in the short term, how much compression could they see on either ethylene or a combined ethylene, polyethylene basis in the U.S.?

Yeah. Good morning, David.

Let me give you a few statistics to help frame the degree of sort of supply growth exceeding demand growth. This is IHS data for your consideration, so 2016 to 2017, by IHS data, we'd estimate that supply for polyethylene has grown by about 7% from 2016 to 2017, and demand has grown at 4%, which is the number we've been talking about for some time and consistent with history.

So you could say perhaps that supply growth from 2016 to 2017 exceeds demand growth by 3%. 2017 to 2018, based on published numbers, supply growth increases by 4.7% and let's assume that demand grows by another 4%.

If you look across those two years, you end up with perhaps operating rates declining by 3%, 4% coming off of very, very high operating rates and what we would consider still to be balanced markets on an annual average basis and tight markets during seasonal periods. If you look at that slide that we showed in our presentation, it shows that the growth really comes in the first three quarters in a year.

And when you think about operating rates, effective operating rates still being in the 90%s post this period of supply exceeding demand growth, I think markets are going to be pretty balanced and as we go into the seasonal upturn in 2018, I think there is the potential for this capacity to be absorbed over that period of time. So and the other thing I would offer is that because of the recent price movements, our starting point is higher than it would have been otherwise.

So, I don't have a crystal ball to tell you how much prices could decline next year, but it seems to me that with the starting point being higher prices and starting point being very high operating rates and modest decline, we're going to have pretty constructive markets.

Good morning, Bob.

Good morning, P.J.

With Brent crude trading in the high $50s or close to $60 today, what is the impact of higher oil prices on your European cracker, what are utilization rates there and what do you expect on co-product values? Thank you.

Yeah. So as you know, in our European fleet, on an annual average basis, a little more than half of our feedstock is non-naphtha based or purchased at a discount to naphtha and I think that will continue.

I think the availability of those what we call advantaged feeds should continue. Higher oil prices should provide for higher co-product prices over time and there is some seasonality in there.

So, I think ticking from low-$50s to upper-$50s on Brent in my mind doesn't materially change the competitiveness of our European assets. And if you consider further, the backdrop of still a relatively weak euro compared to dollar, compared to what it was a couple of years ago, we've seen imports actually decline into Europe this year on polyethylene.

So I think Europe is still going to be competitive and my expectation is that we're going to run at maximum rates next year of available capacity.

Yeah. Just a data point P.J., we were running at 95% during the third quarter in Europe on our crackers.

Yes. Good morning.

Just wondering if you could provide a bit more color on the $200 million impact from Harvey in terms of what the split might be between lost sales and direct costs, as well as color on the impact by major product line or segment, please?

Yeah. Good morning, Kevin.

Most of that was from lost sales in terms of the $200 million impact. We had some fixed costs related to maintenance and so on.

But you can consider most of it to be volume related. In terms of the split on the segments, about 60% in the Americas, 20% IND, 20% refining, approximately that sort of split is what – where the impact landed.

Thank you. You talked about the hurricanes delaying new projects, La Porte was more impacted than your other facilities.

Why wasn't the Hyperzone project delayed?

Yeah. So, first of all let me frame for you kind of our asset base along the Gulf Coast and just to sort of help understand, I think how well we did during the storm.

As I mentioned during my prepared remarks, we've about nine assets, nine individual sites from Corpus Christi to Lake Charles, Louisiana. And in that there are four polyethylene sites and four large crackers.

So, we think about our participation or our number of assets we have relative to others in the industry, we have a considerable amount of assets here, add to that headquarters with about a 1,100 people in Houston and a pipeline system that's more than 2,000 miles. So, if you kind of put all of that in your mind and you think about $200 million impact on mostly lost volume, I think that's really outstanding and really credit to our people.

We weren't impacted on the project at La Porte because we're still very early in the construction. We've just now started to pour foundations and we're coming out of the ground as the same goes in the construction business; so very early.

We still project startup mid 2019 for our polyethylene unit. And given the earliness in our construction, the timeline really hasn't been impacted.

So that's how to think about the project versus the cracker at La Porte.

Yes, good morning. And Bob, just following up on Hyperzone, the next major project that you've going on is PO/TBA, but there has been press reports or speculation that you may be doing a propylene unit as well.

Could you talk about what your plans are on these very large organic growth opportunities?

Yes. So first of all, Frank, we have multiple platforms in the company, which we can build on and that's essentially as we talked about during Investor Day, our aim was to deploy some of our free cash flow into organic growth, so that we could think about earnings growth through cycles and have a positive slope through these cycles and I think we're starting to build a pipeline now.

Having done our ethylene expansions early and having paid for most of them by now, I think we now can focus on derivatives and we can focus on propylene chain, whether it's PO/TBA or polypropylene. So I think this is sort of a continuation of what we laid out during Investor Day and our organic growth opportunities and pipeline, we have ahead of us.

So to me, this is the next natural sort of organic growth opportunity after announcing polyethylene and PO/TBA is to go to polypropylene where we see a market that's growing at reasonable rates. We have a global position in polypropylene.

We have a strong technology position with leading process technology and polyolefin catalyst. So, it's a chance to leverage technology in a region that we think is growing at a rate where there's an opportunity for more capacity to meet that growing demand.

And really what we're thinking through beyond polypropylene is where that propylene will come from and we're thinking about whether we build our own PDH unit or we further purchase more propylene from the market. And to me that's really kind of a make versus buy decision and very return-oriented focus.

So – but it's something that I'd like to see us move with pace and as the report suggest, currently we're on the trajectory of making a final investment decision by the end of next year.

Good morning, everyone. Thank you.

Bob, just as a follow-up on a previous question. You outlined a fairly positive view of ethylene supply and demand in the short term and the long term.

And also, you have a favorable view on ethane availability. So in that context, why is a large scale ethylene investment not on the table right now?

I think, Alex, we have the opportunity to do so many other things at the moment that have equal or better returns. And so, our focus is to build out the polyethylene capacity after Hyperzone, we'll think about whether we want to do another polyethylene plant.

We've talked about that. We're already doing now the PO/TBA project.

So again, to me, we have multiple platforms we can build on and at some point we will cross the decision of additional ethylene and polyethylene capacity. But in the meantime, we can diversify our project – our organic growth through the multiple platforms and that's really what I would prefer at the moment.

Good morning, Bob.

Good morning, Hassan.

Bob, as I take a look at some of the pricing movements that happened post the hurricanes, obviously, ethylene pricing shot up as did polyethylene. But it seems polyethylene shot up at a more rapid rate than ethylene, right?

And one of the arguments that I've been hearing is that there was a comonomer facility outage and there is sort of a fair bit of tightness within the comonomer market, maybe potentially explaining why polyethylene prices ran faster than ethylene. So would just love to hear your views on the comonomer side of things and the role that that may have played on the polyethylene, call it tightness or pricing movement?

I think certainly, Hassan, those two are related, especially in early part of October and the latter part of September, we certainly were looking for other sources of supply for comonomer, and while we were doing that we couldn't run our polyethylene plants at full rate, so post-hurricane to the extent that we could run – we could only run about 80% in September and we've been able to ramp up a little bit more. But that comonomer facility has a significant percentage of supply, about half of the comonomer in the U.S.

comes from that facility and on a global basis something like 20% I believe. So, very important and that has constrained polyethylene production and therefore, the need for ethylene.

I suspect that as we move through November, some of that will ease and the comonomer supply will resume. But we don't really know much more than that at this point.

And then if you think about beyond that, by January, we already be moving into then the seasonal uptick as we do every year in Q1.

Thanks. This is Ian Bennett on for Steve.

The polyethylene supply that's coming on in the U.S., how much has the right technical specification either to be shipped to Europe or absorbed by domestic demand in the U.S.? And are there any steps that Lyondell can take in order to preserve the premium pricing in those two regions?

I think, Ian, first of all, I think it's important to look under the headline of polyethylene and consider how much of the new capacity is linear low density, low density and high density polyethylene. And it's the first thing to think about when we think about destination markets and impact on domestic premiums, if you will.

And the conclusion I think is that there is a reasonable amount of balance between these three polyethylenes and on a percentage basis, by IHS data, it seems that the percentage increase in supply is the greatest in linear low density polyethylene and it's meaningfully so between the conventional and the metallocene linear lows. So, I can't speak for how others have planned for all of that, but I can tell you for us as a company, we've been thinking through all of that.

We've been thinking through moving incremental product through our own marketing network both in Europe and in Asia and supply chains required to reach those markets, and we're very well-prepared and our plans are on a good timeline.

Yes. Good morning, fellows.

Good morning.

Question. As you guys with your technology business have a pretty unique view on a lot of what's happening in the olefins in the future globally.

Two questions of that, your best guess the range of how many new olefin crackers will be announced over the next year globally? And then the second one on that with the Chinese move on environmental stuff, do you think that does anything to their existing or their future plans around CTO and MTO?

Yeah. Thanks, Duffy for your question.

You can understand the confidential nature of our discussions in the technologies segment. So I'll be general in my comments.

First of all, I think the move in China, specifically, are tighter environmental regulation and the move away from recycled polyethylene, both of those point towards more constructive markets globally, and meaning directionally less supply because of regulations and more demand for virgin polyethylene as opposed to recycled polyethylene in China. I think both of those, especially the reduction in recycled content directionally increases operating rates for 2018.

In terms of what we're seeing in our business longer term, I think we do see some delays in also olefin-type projects, especially in the coastal areas and generally some delays in polypropylene decisions as well. So, we don't see a significant sort of wave of expansions on a global basis beyond what's reported by IHS.

So, I'll leave it there to be respectful of the confidential nature of that business.

Thanks. Good morning, guys.

Good morning.

The numbers you listed earlier, you said demand growth of 4%, supply of 7%. I've seen the same numbers, but they just don't add up, right, because margins didn't change.

So what do you think is wrong with these numbers or where – in what direction are they wrong or why don't they match up?

Well, it could be, Jonas, again I'm quoting IHS data and it could be that the expansions are sort of back end loaded in the year that could potentially explain part of that. But the other is and I continue to believe their operating rates are so high that 2%, 3% reduction in operating rates doesn't put us in a significantly different market environment.

You add to that seasonality and now the hurricane impact, which likely moderates Q4 2017, I think all of that says, as we've suggested in our prepared remarks that markets are well-positioned to absorb a good bit of this new capacity that's coming. So, perhaps those things help explain what your question is.

Hey, good morning, Bob.

Good morning, Matthew.

I was just hoping you could talk about the refining side, the IMO 2020 sulfur spec. It seems that could be a pretty big positive to your plant, which I believe produces a relatively low percentage of fuel oil considering all the heavy crude it runs.

So, are you seeing the same things and also would you plan any sort of investments around the refinery to better take advantage of this upcoming sulfur spec? Thanks.

Yeah. Well, Matthew, this IMO topic has gained more momentum as the year has gone on.

And this is essentially the change in the bunker fuel spec for a shift that fuel would lower sulfur as a cap, if you will. Our refinery is really well positioned to take advantage of upside that this potentially might represent.

The upside for the rest of our listeners, it really comes from two sources, one is from potentially wider light to heavy differentials on crude pricing. The theory being that heavier crudes will be more in supply as fewer refineries can meet the sulfur specifications.

The other is, we think, as you mentioned, Matthew, stronger distillate margins, which again are very heavy, complex refinery – heavy crude processing complex refinery is well-positioned to capture indeed (47:34) stronger distillate margins come about. So as time goes on, we're going to monitor this and see how it plays out.

But as it stands today, a new regulation will go into effect in January of 2020, which is not so far away now. And I think we'll have very good visibility next year.

So I like how our refinery is positioned. As to your question about what are we doing in the meantime?

Our focus really is about having a highly reliable refinery, we've already made improvements from 2016 to 2017 as evidenced in our numbers, and we want to be positioned as well as possible to operate at very high rates, whether IMO has an impact or not. And so, we're quite focused on an improvement plan, which we're implementing and I'm quite pleased with the results in 2017 and very aware that we need to continue to deliver results year-after-year at our refinery, much like we do with all the other assets in the company.

So, we'll have to see how this goes, but we're encouraged by what IMO may represent for our refinery.

All right. Thank you, Michele.

Well, with no further questions in the queue, let me close with a few remarks. We've operated well through Q3 this year and I'm especially proud of our team and how well they've responded to this extraordinary natural disaster that was Harvey.

Nearly 40% of our employees in a significant part of our global asset base were in the path of the storm. Our team remains consistently focused on safe, reliable, cost efficient operations.

I continue to believe these strengths and focus provide the foundation for future growth, towards which we have made significant strides in through Q3 2017. In early February 2018, we look forward to discussing our full-year results from 2017 and we will have an expanded earnings call at that time, during which we'll provide updates on LyondellBasell growth strategy.

Until then, thank you for your thoughtful questions and continued interest in our company. With that, our call is adjourned.

Thank you.