Exxon Mobil considering Baytown expansion
HOUSTON (AP) — Exxon Mobil Corp. is considering a multi-billion-dollar expansion of its giant petrochemical complex east of Houston.
The company estimated the expansion at its Baytown complex about 30 miles east of Houston would provide about 10,000 construction jobs, then 350 permanent jobs once new facilities are up and running. Exxon anticipates a 2016 start-up.
Exxon, like other petrochemical firms that have announced expansions, is looking to take advantage of a surplus of natural gas that's pushed prices near 10-year lows in the U.S.
"We believe the North American natural gas resource is abundant and can support both domestic energy needs as well as exports to the global market," spokeswoman Margaret Ross said Friday. "The proposed investment reflects Exxon Mobil's continued confidence in the natural gas-driven revitalization of the U.S. chemical industry."
Exxon has one key advantage: It can use its own gas. The company is now North America's largest natural gas producer.
The company has filed applications for permits with the U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality to build an ethane cracker at the Baytown complex and two high performance polyethylene lines at its nearby plastics plant in Mont Belvieu.
Exxon expects the review and approval process from government regulators should take about a year. It would then make a decision on whether to move forward with the project.
The Baytown steam cracker would handle up to 1.5 million tons annually and provide 650,000 tons of feedstock for the new lines at the Mont Belvieu plastics operation.
Exxon said the project could result in 3,700 jobs in the Baytown area besides the temporary construction jobs and permanent positions. It also estimated the expansion could add some $870 million to the local economy and contribute $90 million in tax revenues.
Exxon Mobil's Baytown complex, covering five square miles, already is the largest in the nation and has been in operation since 1920. Its refinery can process up to 584,000 barrels of crude oil per day. Two chemical plants at the site, beginning in 1940, now count among their products chemicals used in manufacturing of tires and plastics for auto parts like bumpers.
The Exxon Mobil plastics operation at Mont Belvieu, about 13 miles from the main site, makes chemicals for use in products like grocery bags and packaging films. It's been operating since 1982.
Six weeks ago, Dow Chemical Co. announced a $1.7 billion expansion of its operations southwest of Houston in Brazoria County, adding up to 600 permanent workers when finished in five years and 4,800 construction jobs. And Chevron Corp. plans to build an additional plant in Baytown to produce a component of plastic resin.
While oil prices remain high, nnatural gas recently has dropped to around $2 per 1,000 cubic feet, the lowest price in more than a decade. The supply glut is being fueled by a boom in hydraulic fracturing, or fracking, the high-pressure injection of water, sand and chemicals deep underground to break up rock formations and allow for release of more natural gas.
Exxon became the top natural gas producer when it acquired XTO Energy Inc. in 2010.
