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Exxon, SABIC Mull Joint Petrochemical Venture on US Gulf Coast

NatGas Pipeline

ExxonMobil and Saudi Basic Industries Corp (SABIC) are evaluating the potential to build a jointly-operated petrochemical complex on the US Gulf Coast, the companies said in a statement on Monday.

ExxonMobil’s affiliate ExxonMobil Chemical Company and SABIC are assessing the potential development of such complex in either Texas or Louisiana. Should the facility be developed, it would be located close to natural gas feedstock and would have steam cracker and derivative units.

The companies will be working with the local authorities to identify the site of the future complex and will carry out the necessary studies before making any final decision on investment, Exxon said.

ExxonMobil and SABIC are assessing potential locations in Louisiana’s St. James Parish and the Parish of Ascension, and in Texas’s Victoria and San Patricio Counties, in cooperation with state and local governments, spokeswomen for both companies told Platts. The firms are seeking development for a 1.8 million mt/year ethylene plant which is expected to feed two polyethylene units and a monoethylene glycol facility, according to Platts.

The companies are currently at a very early stage in the process, ExxonMobil spokeswoman Margaret Ross said, adding that she could not speculate on a specific timeline.

Related: Bizarre Lawsuit Could Derail Elon Musk’s Hyperloop

ExxonMobil and SABIC have been working on major chemical projects in Saudi Arabia for 35 years. The potential joint complex on the US Gulf Coast would be SABIC’s debut on the North American derivatives production market.

“We are focused on geographic diversification to supply new markets,” the Saudi Arabian corporation’s vice chairman Yousef Abdullah Al-Benyan said.

ExxonMobil Chemical Company’s president Neil Chapman reckons that the potential complex would be competitive on a global scale, as expectations are that most of the chemical demand growth in the next few decades would come from developing economies.

By Tsvetana Paraskova for Oilprice.com

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