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ExxonMobil Planning South Texas Ethane Cracker

ExxonMobil Chemical recently made a regulatory filing to add a multi-billion-dollar ethane cracker and other facilities at its Baytown, TX, chemicals complex with the intention of taking advantage of cheap ethane being thrown off by liquids-rich shale gas plays.

Filings were made with the U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality. All governmental reviews and approvals for the facility are expected to take about a year. The company said it will make a final investment decision following approvals. The facilities could be online in 2016.

"The proposed investment reflects ExxonMobil's continued confidence in the natural gas-driven revitalization of the U.S. chemical industry," the company said. "Domestic energy production continues to lift the U.S. economy and grow jobs at a pace faster than the national average. The natural gas revolution in the United States, 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."

The proposed Baytown steam cracker would have a capacity of up to 1.5 million tons per year and provide ethylene feedstock for two new 650,000 tons per year high-performance polyethylene lines at the company's nearby Mont Belvieu Plastics Plant in Texas. "This proposed expansion would enable ExxonMobil Chemical to economically supply the rapidly growing demand for high-value polyethylene products, which are used in a wide range of consumer and industrial applications," the company said. "ExxonMobil Chemical estimates exports could increase significantly as a result of the expansion."

The company also made a filing for expansion of facilities at its Mont Belvieu Plastics Plant.

If developed, it is estimated that the projects would create about 10,000 temporary construction jobs. In addition, about 350 permanent jobs would be added to the company's workforce of 6,500 (full-time and contractor) in the Baytown area. The proposed project would also have a multiplier effect and create an additional 3,700 jobs in the local community, ExxonMobil said. It's also estimated that the project would increase regional economic activity by roughly $870 million per year and generate more than $90 million per year of additional tax revenues for local communities.

Multiple companies have announced ethane-focused infrastructure projects, spurred by growing supplies of the commodity thanks to shale plays (see Shale Daily, March 29). Shell, for instance, recently picked Pennsylvania as the location for a potential new ethane cracker that would take advantage of Marcellus Shale supplies (see Shale Daily, March 16).

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