Motiva eyes petrochemical play
Saudi Aramco unit is considering $6.6B investment to expand business
The Houston subsidiary of Saudi Arabia's national oil company is considering some $6.6 billion worth investments in its Port Arthur refinery to expand into the petrochemical business.
Motiva Enterprises, owned by Saudi Aramco, is evaluating a $4.7 billion plant, known as a steam cracker, to produce ethylene, a chemical used to produce the world's most common plastic, polyethylene, and other petrochemicals, according to documents filed with the Texas Comptroller's office.
Motiva also is considering a $1.9 billion complex that would produce benzene and paraxylene, byproducts of gasoline production, according to the documents. Both projects would be complete by 2022 if the company decides to move forward with the investments and receives the necessary permitting.
The expansion of Motiva Enterprises LLC could create thousands of construction jobs and propel the nation's biggest oil refinery into the petrochemical industry. The projects would come at time several new petrochemical projects are underway on the Gulf Coast as refineries look to diversify their businesses to make up for flattening demand for motor fuels in the next couple decades.
Motiva has expressed interest in petrochemicals manufacturing in Texas, but the Comptroller's documents reveal new details and a potential timeline for the projects.
Saudi Aramco hasn't decided yet whether it would build the petrochemical projects in Port Arthur or in other locations in Texas or Louisiana, according to documents filed with the Comptroller.
Motiva filed for tax incentives from the Port Arthur Independent School District in connection to the projects in November, but the documents weren't posted on the state comptroller's website until this week.
Angela Goodwin, a Motiva spokesperson, said the company is "actively exploring several opportunities along the Gulf
Coast."
"Final investment decisions by the Board of Directors are not expected to be made until the end of 2019 and are dependent on strong economics, competitive incentives and regulatory support," Goodwin said.
If the board greenlights the projects, construction of the steam cracker would start in the first quarter 2020, according to the Comptroller documents. Construction the socalled-aromatics complex for benzene and paraxylene would begin in the second quarter of 2020. Both projects would wrap up in the fourth quarter of 2022.
At peak construction, the petrochemical projects would create 4,300 construction jobs together. Once completed, both projects would support 255 permanent jobs, with an average annual salary of about $80,000, according to the Comptroller documents. This April, Aramco signed memoranda of understandings worth $8 billion-$10 billion with Honeywell UOP and Technip FMC to study petrochemical production technology for a potential Port Arthur chemical project.
In June, Motiva said it was no longer considering a massive expansion of oil refinery and would instead focus on expanding its petrochemical business and potentially purchasing another oil refinery or complex.