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ExxonMobil Plans U.S. Expansions

Petrochemicals: Company is the latest firm to announce new ethylene capacity in the U.S.

by Alexander H. Tullo
June 10, 2012 | A version of this story appeared in Volume 90, Issue 24

Credit: ExxonMobil
ExxonMobil’s petrochemical complex in Baytown, Texas, where the company is planning a new 1.5 million-metric-ton-per-year ethylene cracker.
A panoramic photo of water-front a chemical plant at sunrise. The many towers, still lit up from the night, are reflected in the water.
Credit: ExxonMobil
ExxonMobil’s petrochemical complex in Baytown, Texas, where the company is planning a new 1.5 million-metric-ton-per-year ethylene cracker.

ExxonMobil Chemical is planning a multi-billion-dollar ethylene and polyethylene expansion project for the U.S. Gulf Coast, making it the sixth firm to unveil cracker plans in a little more than a year.

ExxonMobil aims to build an ethylene cracker with 1.5 million metric tons of annual capacity at its complex in Baytown, Texas. Downstream from the cracker, the company is planning two new polyethylene units, each with 650,000 metric tons of capacity, at its Mont Belvieu, Texas, facility.

The company has already filed applications for environmental permits with EPA and the Texas Commission on Environmental Quality. The approvals are expected in about a year. According to the EPA filings, construction will begin next March and be completed in the second quarter of 2016.

ExxonMobil says the new plants are meant to tap into low-cost ethane feedstock derived from shale oil. “The natural gas revolution in the U.S., driven by industry innovation, is enabling U.S. chemical manufacturers like ExxonMobil to invest in America, create thousands of U.S. jobs, and increase sales to domestic and global markets,” a company statement says.

Five other firms—Chevron Phillips Chemical, Dow Chemical, Shell Chemicals, Sasol, and Formosa Plastics—have unveiled plans for new crackers in the U.S. Many other firms have hinted at similar plans or are planning incremental expansions of existing facilities.

Balaji B. Singh, president of the Houston-based chemical consultancy Chemical Market Resources, says the market for ethylene derivatives such as polyethylene won’t be able to support all the new supply that is planned. “You cannot have that much capacity; somebody has to drop off,” he says.

Thus, Singh notes, those companies that are able to bring capacity on-line before their peers will have a big advantage. It bodes well for ExxonMobil, he notes, that it has already filed for environmental permits for its project. Of the other firms that have announced new crackers thus far, Singh says, Dow and Chevron Phillips are the most likely to follow through with actual capacity on the ground.



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