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July 20, 2021 10:24 AM

Reports question future of Motiva's Texas petrochemicals project

Frank Esposito
Senior Staff Reporter
Plastics News Staff
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    Several news reports are raising doubts about Motiva Enterprises LLC's plans to build a petrochemicals unit in Texas.

    The Wall Street Journal first reported on July 19 that Houston-based Motiva — a unit of Saudi oil giant Aramco — was suspending plans to build a $6.6 billion complex in Port Arthur that would have included an ethane cracker and downstream units making polyethylene resin. The Associated Press later followed with a similar report, citing "financial pressure" from lower oil prices and "a heavy dividend burden" that Aramco took on when it went public in 2019.

    The AP story added that Motiva's plans to delay the project "could still change" and the project "could get the green light eventually," but the suspension won't be revisited for at least a year.

    Bloomberg took a different angle on the story, saying in a report that Motiva "is eyeing the revival" of the project in 2023. The report added that work on the project ended in the second half of 2019 but that it could be revived without including the ethane cracker.

    Motiva officials could not be reached to comment on any of the reports about the Port Arthur project.

    The Bloomberg report also said that Motiva "is reevaluating the massive expansion in Texas as consumption of plastics skyrockets." It added that oil firms such as ExxonMobil Corp. and Royal Dutch Shell plc "are making more money from their petrochemical operations than they have in years."

    "Supply disruptions and pandemic-related demand has bolstered the need for construction, manufacturing and consumer products that heavily rely on the processing of chemicals like ethylene," the report said.

    In August 2019, Motiva acquired an ethane cracker in Port Arthur from Flint Hills Resources for an undisclosed price. That unit makes plastics feedstocks ethylene, propylene and cyclohexane.

    Motiva already had owned a refinery in Port Arthur. The firm formed in 1998 as a joint venture between Aramco and Shell. Aramco bought out Shell's part of the JV in 2017.

    In early 2019, Aramco paid almost $70 billion for a 70 percent stake in global commodity and engineering resins supplier Saudi Basic Industries Corp. Aramco also has partnered with Dow Inc. on the Sadara plastics and petrochemicals joint venture in Saudi Arabia.

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