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Eastman Signs Gasification Services Agreement with ChevronTexaco.

Business Editors

KINGSPORT, Tenn.--(BUSINESS WIRE)--Jan. 23, 2003

Eastman Chemical Company (NYSE:EMN) today announced it has signed a cooperative agreement with Texaco Development Corporation, a wholly owned subsidiary of ChevronTexaco Corp., that enables Eastman to provide operation, maintenance, management and technical services, as well as parts fabrication and sales for gasification plants of Texaco Development licensees.

"We're excited about the opportunities that this agreement will provide Eastman to operate and maintain gasification facilities for other companies," said Brian Ferguson, Eastman's chairman and CEO. "With 20 years of gasification experience we have developed the capabilities and know-how to create significant additional value for the users of this technology.

"Eastman's gasification services are designed to help customers achieve a faster start-up to capacity, maximize plant value and improve long-term performance," Ferguson said. "Whether the production option is power, chemicals or fuels, Eastman can work with Texaco Development licensees to maximize the value creation and performance of their gasification investment."

In 1983, under a license from Texaco Development, Eastman launched the first commercial gasification facility in the United States that used coal as a raw material to produce industrial chemicals. These chemicals are important building blocks for the manufacture of a wide range of consumer products, including plastics, textile fibers and photographic film.

Today, Eastman's facility has one of the highest reliabilities within the solids gasification industry, averaging better than 98 percent uptime every year since 1984 and 91 percent uptime within its initial start-up year. The facility, which regularly produces syngas using twin ChevronTexaco gasifiers at more than 140 percent of the original design rate, has approximately 1 percent forced outages on an annual basis.

Gasification Benefits for the Chemical and Power Industry

Congress and other federal organizations currently are concerned about emissions and climate change, and the clean operation of coal plants in the chemical and power industry. Coal gasification is quickly emerging as the best solution to national environmental and energy objectives. In addition to its potential for producing chemicals and low-sulfur synthetic fuels, gasification is the cleanest of all technologies for producing power from coal or petcoke. It inherently reduces the components SOx, NOx, and particulate matter that can contribute to smog, acid rain and respiratory problems. Removal of volatile mercury to 90+ percent is proven and relatively inexpensive, and gasification can capture CO2 at 10 percent of the cost associated with other coal options. Gasification also enables an easier transition from an oil-based fuel economy to a hydrogen economy since hydrogen is a major product of the gasification process.

Eastman's gasification services are part of the company's corporate strategy to move beyond its core businesses and create offerings that leverage the company's areas of expertise. In announcing this agreement, Eastman is well-positioned to help make gasification the environmentally friendly technology of choice for all new coal-based power production facilities.

Terms of the agreement were not disclosed.

With headquarters in Kingsport, Tenn., Eastman manufactures and markets chemicals, fibers and plastics. The company has approximately 15,800 employees in more than 30 countries and had 2001 sales of $5.4 billion. To learn more about Eastman and its products, visit www.eastman.com. To learn more about Eastman's gasification services businesses, visit www.gasificationservices.eastman.com or send email to gasification@eastman.com.
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Publication:Business Wire
Geographic Code:1USA
Date:Jan 23, 2003
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