Exxon Plans Expansion at Houston-Area Plants

Exxon Mobil is mulling expanding its hulking Baytown petrochemical plant to take advantage of the current surplus of natural gas.

The company announced plans Thursday to build another ethane cracker in Baytown and two polyethylene lines at its Mont Belvieu plastics plant, the Associated Press reported. The heater in the ethane cracker would use natural gas, helping Exxon “capitalize on abundant supplies of American natural gas,” a spokeswoman said in an e-mail to the Wall Street Journal.

The company has submitted permit applications to the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency. If Exxon still views the expansion as financially viable after the approval process (which is anticipated to take a year), all parts of the expansion could be online by 2016. The construction would create 10,000 temporary jobs for the Houston area and 350 permanent new jobs at the plant.

“Companies such as Dow Chemical and Royal Dutch Shell have also recently undertaken petrochemical projects made profitable by low natural gas prices,” Angel Gonzales pointed out at Hydrocarbon Processing.

CEO Rex Tillerson told an assembled crowd at the Exxon’s annual shareholder meeting that natural gas, despite the current drop in prices, is going to be huge, the Houston Chronicle‘s Zain Shauk reported. Exxon made $41 billion in profit last year.

“The world’s largest publicly traded company has bet big on the future of natural gas, which Tillerson believes will replace coal as the No. 2 fuel behind oil,” Shauk wrote. “Exxon Mobil became the nation’s largest gas producer after it acquired XTO Energy for $25 billion in 2010.”

The news of the potential Exxon expansion comes a day after the Motiva plant, in Port Arthur, marked the completion of its expansion with a ribbon-cutting ceremony. The Motiva plant, a joint venture of Royal Dutch Shell and Saudi Aramco, now has a refining capacity of 600,000 barrels of crude per day, stealing from Exxon’s Baytown plant the distinction of being the largest refinery in the country (The Baytown plant puts out 584,000 barrels per day.)