Backed by a plethora of natural gas supplies from its upstream business, ExxonMobil Chemical Co.’s multi-billion-dollar plan to expand its Baytown, TX, petrochemicals complex is on track, an executive said Tuesday at the IHS CERAWeek 2013 conference in Houston.

The chemical unit last spring filed permit applications with the U.S. Environmental Protection Agency and Texas regulators to build the world-scale steam cracker at its Baytown complex east of Houston to convert ethylene to polyethylene products and export them to global markets. State officials are optimistic about final approvals, said ExxonMobil Chemical President Stephen Pryor.

Feedstock and energy supplies would be coordinated with ExxonMobil Corp.’s upstream business, which oversees North America’s top natural gas production operations.

“The project will be a win-win for ExxonMobil and Texas, a pro-business state [that] has attracted more ExxonMobil investment than anywhere in the country, and where we are the state’s largest taxpayer,” Pryor told the audience. The “unique project builds on our proven integration model. It will be sustained over the ups and downs of the business cycle by advantages in integration, scale and premium products.”

The ExxonMobil executive noted that he had spoken at the CERAWeek conference in 2011 to outline the Irving, TX-based operator’s model to integrate refining and chemicals. “Today, we’re building on that model — making it even more robust — by expanding integration with our upstream business to capitalize on growing supplies of unconventional gas.”

ExxonMobil’s project is one of several announced petrochemical expansions in North America that are designed to take advantage of burgeoning gas supplies and low costs. The reversal in fortune for domestic chemical operators has led to huge opportunities, Pryor said. For the first time in more than 10 years, “major capacity additions have been announced that convert ethane, a natural gas liquid, to ethylene, the largest petrochemical building block.”

A recent study by the Federal Reserve found that the announced U.S. ethylene conversion projects together would represent a capacity increase of one-third by 2017, or equal to six to eight world-scale steam crackers.

“While all announced projects may not materialize, the U.S. industry is clearly poised to expand its position as a leading petrochemical producer,” said Pryor. “With 85% of global demand growth projected to occur in emerging markets, this is great news for U.S. exports.”

If the planned Baytown expansion receives the required permits and moves to the construction phase, it would provide an estimated 10,000 construction jobs at its peak. The project also would have a “multiplier effect,” creating up to 3,800 other jobs in other areas and increasing regional economic activity by $870 million per year.

“Just five years ago, American chemical production was in steady decline due largely to the rising price of natural gas,” said the chemicals chief. “The U.S. was on the verge of becoming a net chemical importer. Growing supplies of shale gas and gas liquids have changed all that. North American chemical manufacturers now have a major cost advantage over competitors around the world that rely on more expensive, oil-based feedstocks. This has boosted profitability and enabled the industry to regain its position as America’s largest exporter.”

U.S. chemistry “is a $760 billion industry, supplying products which touch 96% of manufactured goods,” he said. However, only five years ago domestic chemical output was in steady decline, largely in part to rising natural gas costs. “Growing supplies of shale gas and gas liquids have changed all that.”

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