ExxonMobil Corp. and its Saudi Arabian partner on Thursday pulled the trigger to sanction the world’s largest steam cracker, a 1.8 million metric ton/year project on the South Texas coast that would create thousands of jobs and billions in economic output.
The decision to build Gulf Coast Growth Ventures near Corpus Christi in San Patricio County came one day after the Texas Commission on Environmental Quality granted a series of permits for the project.
The joint venture (JV) between affiliates of ExxonMobil and Saudi Basic Industries Corp., i.e. SABIC, would rely on abundant Lower 48 natural gas, particularly from the Permian Basin and Eagle Ford Shale, to fuel the facility.
“Building the world’s largest steam cracker, with state-of-the-art technology, on the doorstep of rapidly growing Permian production gives this project significant scale and feedstock advantages,” said ExxonMobil CEO Darren W. Woods. “It is one of several key projects that provide the foundation for significantly increasing the company’s earnings potential.”
Construction is scheduled to begin in the third quarter with startup anticipated by 2022. Included in the design are two polyethylene units and a monoethylene glycol unit.
SABIC CEO Yousef Al-Benyan noted that the JV would be its first “outside of Saudi Arabia. This project will not only increase global diversification for our company, but will also continue to create value within our new home of San Patricio County through creating jobs and supporting economic growth.
With this project, we look forward to further building our business presence in the U.S. and serving the communities and customers in the North and South American markets even more effectively.”
SABIC is the operating partner for two long-standing JVs with ExxonMobil in the Kingdom of Saudi Arabia, Kemya in Jubail and Yanpet in Yanbu.
The South Texas facility is expected to create more than 600 permanent jobs with average annual salaries of $90,000/year, according to ExxonMobil. An additional 6,000 jobs would be created during construction.
“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,” according to the partners.
The project would be designed to produce materials used in the manufacturing of various consumer products including automotive coolants, packaging, agricultural film and building, construction materials and clothing.
Project construction is to 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.
ExxonMobil has been bearing down on expanding its Gulf Coast presence under its $20 billion Growing the Gulf initiative, which in total could create more than 45,000 jobs across the region. The supermajor has projects in the works that include a state-of-the-art aviation lubricants blending, packaging and distribution facility in the Baton Rouge, LA, area, as well as refining and chemical expansions at the Beaumont and Baytown facilities east of Houston.
In addition, ExxonMobil and Qatar Petroleum in early February sanctioned the Golden Pass liquefied natural gas export project in Sabine Pass, TX, which is estimated to cost around $10 billion.
Gulf Coast Growth Ventures “is a unique opportunity created by the abundance of low cost U.S. natural gas,” ExxonMobil noted. “The project is part of SABIC’s growth strategy to build new petrochemical facilities in key markets, including the Americas, to address industry demand and achieve the company’s 2025 strategy.”
The project is 50% owned by each partner, with ExxonMobil as site operator.