(Repeats to add exclusive tag)
* Plans multi-billion dollar chemical plant in Texas
-environmental filing
* To take advantage of cheap North American shale gas
* Plant could be online by 2016 and help compete with rival
Dow Chemical
* 10,000 construction jobs, 350 permanent jobs expected
By Ernest Scheyder
NEW YORK, May 31 (Reuters) – Exxon Mobil Corp, the
world’s largest publicly traded energy company, plans to build a
multi-billion dollar chemical plant in Texas to take advantage
of cheap North American shale gas, according to a U.S.
environmental filing seen by Reuters.
The plant, which could be online as soon as 2016, would
sharply crank up Exxon Mobil’s chemical production capacity and
help it compete more effectively with rival Dow Chemical Co
, the largest U.S. chemical maker.
Exxon Mobil has been North America’s largest natural gas
producer since its 2010 purchase of XTO Energy Inc. By using its
own natural gas in chemical production – something Dow is not
able to do because it does not drill – Exxon Mobil further
slashes its costs.
The company had said as recently as last year it had no
plans to expand chemical production in the United States.
However, decades-low natural gas prices proved too much too
resist.
Its decision to build the new plant also comes after a
recent announcements by Dow, as well as Royal Dutch Shell Plc
, LyondellBasell and others to expand their own
U.S. chemical production.
U.S. natural gas prices have dropped more than 20 percent so
far this year. Chemical industry trade groups expect prices to
remain low for years due in part to ramped up production from
the shale reserves.
That gives U.S. producers a large cost advantage over
European and Asian rivals, many of whom have to use crude
oil-derived naphtha to make chemicals.
Exxon Mobil’s plant, if approved, will be built at the
company’s Baytown complex and is expected to produce 1.5 million
tons annually of ethylene, a key material in plastics
production.
The ethylene will be piped to the company’s nearby Mont
Belvieu complex, where it will be used in two planned
polyethylene production facilities, each expected to have an
annual capacity of 650,000 tons per year.
Polyethylene is commonly used to make packaging and
upholstery.
The expansion should create 10,000 construction jobs and
boost Exxon Mobil’s permanent work force in Baytown, Texas, by
350 to 6,850, the company said.
More than $90 million per year in additional tax revenue and
3,700 extra jobs will be created in the local community, Exxon
Mobil estimates.
Construction should begin by next March, according to the
filing.
Exxon Mobil filed with the U.S. Environmental Protection
Agency and Texas officials earlier this month. It expects
regulatory approval within the year.
(Editing by Ed Davies)
