According to a Wednesday afternoon news release from the Kingsport-based company, the decision was made based on — among other things — high capital costs, the current and foreseen reduced spread between natural gas and oil and petroleum coke prices, and continued uncertainty regarding U.S. energy and environmental public policy.
As a result of this decision, the company will recognize a pre-tax non-cash asset impairment charge estimated to be between $150 million and $180 million in the fourth quarter of 2009.
“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,” said Jim Rogers, president and CEO.
Rogers added, “Eastman is committed to being an outperforming chemical company. I am confident we will deliver profitable growth through the combination of our solid core businesses and strong financial profile.”
Eastman’s chemicals, fibers and plastics are used as key ingredients in products that people use every day.
A global company headquartered in Kingsport, Eastman has approximately 10,000 employees and had 2008 sales of $6.7 billion.
For more information visit www.eastman.com.