HOUSTON: Saudi Arabia’s national oil company Saudi Aramco on Saturday is expected to disclose initial steps toward a multi-billion dollar chemical plant in Texas, according to sources familiar with the company’s US operations.
Saudi Aramco has been weighing an expansion of its US subsidiary Motiva Enterprises LLC’s Port Arthur, Texas refinery, already the largest in the United States by capacity.
But Motiva wants to first move into petrochemicals, using abundant natural gas from US shale fields to make the precursors for plastics, the sources said.
Texas Governor Greg Abbott is expected to attend an event in Houston on Saturday where Saudi Crown Prince Mohammed bin Salman, Saudi Energy Minister Khalid al Falih and Saudi Aramco Chief Executive Amin Nasser are to discuss the plans, according to a Saudi Aramco representative.
“Motiva is actively exploring a number of opportunities as part of its growth strategy,” the company said on Friday. “These opportunities include locations where we currently operate as well as new ones.”
Saudi Aramco last year said it would invest $18 billion in Motiva’s Port Arthur refinery, which can process up to 603,000 barrels of crude oil per day (bpd).
Motiva wants to add an ethane cracker near its refinery that could produce more than 1.5 million tonnes of ethylene a year, the sources said. The announcement will also include an agreement with TechnipFMC for a study of producing materials used in gasoline and industrial solvents, Bloomberg News reported on Friday.
Motiva Chief Executive Brian Coffman last month said the company had yet to win approval for its major expansion projects.
Other US companies, including Chevron Phillips Chemical Co — a joint venture of Chevron Corp and Phillips 66 — and Exxon Mobil Corp, have recently have opened plants to process ethane into ethylene. Chevron Phillips is considering building a second ethane cracker on the Gulf Coast of Texas.
The price tag for a large ethane cracker is typically over $6 billion, according to Steve Lewandowski, vice president of Global Olefins at researcher IHS Markit.
“Ethane crackers make a lot of hydrogen which refiners can use in hydrocrackers and hydrotreaters” to make motor fuels, Lewandowski said.
Exxon is separately proposing to build with another Aramco unit, Saudi Basic Industries, a $9 billion petrochem plant near Corpus Christi, that would process ethane. — Reuters
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