In what would amount to a major move into the U.S. chemical business, the oil company Saudi Aramco is considering projects to build ethylene and aromatics complexes in the U.S. at a cost of $8 billion to $10 billion.
Motiva, the company’s U.S. refining arm, signed a preliminary agreement to use ethylene technology from the engineering firm TechnipFMC. It also signed an agreement with the technology firm UOP for aromatics production and extraction technology. It would be used to build a complex making benzene and p-xylene on the U.S. Gulf Coast.
“These agreements signal our plans for expansion into petrochemicals,” Motiva President and CEO Brian Coffman says. Motiva says it won’t make a final investment decision until 2019.
Aramco is keen on investing in petrochemicals as a new outlet for its vast production of oil as the transportation fuel market matures and, eventually, declines. In Saudi Arabia, the company is considering an “oil-to-chemicals” complex with partner SABIC that would annually make 9 million metric tons of petrochemicals from 400,000 barrels per day of crude oil.
The agreements covering the U.S. projects were signed in Houston before Saudi crown prince Mohammed bin Salman, who is visiting the U.S. While in Houston, the Saudi leader toured an Aramco R&D center.
Aramco took over Motiva from joint venture partner Shell last year. Motiva operates a refinery in Port Arthur, Texas. In 2012, the firm completed a $10 billion project to double the facility’s capacity, making it the largest refinery in North America.