Motiva Enterprises LLC plans to relaunch a multibillion-dollar expansion project at its Texas Gulf Coast refinery in 2023 that would produce petrochemicals used to make everything from plastic water bottles to bags grocery store.
Engineering and excavation work had already been carried out before the project was shut down nearly two years ago. Now Saudi Aramco’s U.S. refining arm plans to reactivate the expansion, minus an ethane cracker, which it no longer needs, according to people familiar with the plans, who have asked not to be identified because the information is not public.
Motiva originally intended to build an ethane cracker that produces ethylene, a key component for manufacturing plastics and solvents, as well as other downstream units to process ethylene.
The refiner put the project on hold when it bought the adjacent chemical plant from Flint Hills Resources LLC in late 2019, which gave it an ethane cracker, but not all of the downstream units needed to turn ethylene into plastics and other products.
Motiva reassesses massive expansion in Texas as plastic consumption skyrockets. Oil majors, including Exxon Mobil Corp. and Royal Dutch Shell Plc, make more money from their petrochemical operations than they have in years.
Supply disruptions and demand associated with the pandemic have heightened the need for construction, manufacturing and consumer products that rely heavily on the processing of chemicals like ethylene.
Ethylene, which traded at a seven-year high of 59.5 cents per pound in March, is down from highs but has recently risen. The spot price on Friday was 52.5 cents a pound, up 11 cents from the previous week, according to CIHI, a data and analytics provider.
An alternative plan under discussion for Port Arthur involves Motiva buying another chemical facility in the area that would give it access to downstream processing units without having to build them. Motiva sent the ethylene from its ethane cracker to local chemical plants for further processing or to sell the pure ethylene.
Motiva officials declined to comment on Monday.
The original project was estimated to be worth $ 6.6 billion in 2018, according to local media, citing information from the Texas Comptroller’s Office. Most of the value was for the construction of the ethane cracker, estimated at around $ 4.7 billion.
Motiva’s 607,000 bpd refinery in Port Arthur, Texas is the largest in the United States. Its offices are in Houston.