ExxonMobil, Sabic to move forward with Texas JV

ExxonMobil Chemical Co. and Sabic Innovative Plastics are moving forward with the construction of a chemical facility and a steam cracker with an annual capacity of 1.8 million metric tons in San Patricio County, Texas, the companies said in a statement.
 
The June 13 announcement came after the joint venture called Gulf Coast Growth Ventures, received final environmental regulatory approval earlier in the month.
 
The facility will include “the world’s largest steam cracker,” two polyethylene units and a monoethylene glycol unit.
 
Construction will begin in the third quarter of 2019 and startup is anticipated by 2022.
 
The two companies did not offer a cost evaluation for the project but the figure of $10 billion has been reported by the press.
 
“Building the world’s largest steam cracker, with state-of-the-art technology, on the doorstep of rapidly growing Permian [basin] production gives this project significant scale and feedstock advantages,” ExxonMobil CEO and Chairman Darren Woods said. 
 
ExxonMobil expects to significantly increase its earning potential through this facility and a number of other key projects, he added.
 
For Sabic, which is currently being acquired by the Saudi energy giant Aramco, the project is part of the “global diversification” of the company.
 
“With this project, we look forward to further building our business presence in the US and serving the communities and customers in the North and South American markets even more effectively,” said Sabic vice chairman and CEO Yousef Al-Benyan.
 
The project is expected to create more than 600 permanent jobs, each paying an average salary of $90,000 per year.
 
A preliminary independent study, conducted by Impact DataSource, estimates the project will generate more than $22 billion in economic output during construction and $50 billion in economic benefits during the first six years of operation.
 
The facility will produce materials used in the manufacturing of various consumer products including automotive coolants, packaging, agricultural film and building and construction materials and clothing.
 
Project construction will be led by four primary engineering, procurement and construction companies: The Wood Group, McDermott & Turner Industries Group, Chiyoda & Kiewit and Mitsubishi Heavy Industries & Zachry Group.
 
The two companies initially announced their plans for the major project in May last year. At the time, the two companies put an estimate of $7.3 billion for the 50/50 joint venture.