Aramco eyes setting up petrochemical plant in Texas


HOUSTON: Saudi Arabia’s national oil company Saudi Aramco on Saturday is expected to disclose initial steps toward a multibillion-dollar chemical plant in Texas, according to sources familiar with the company’s U.S. operations.

Saudi Aramco has been weighing an expansion of its U.S. 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 U.S. 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 tons of ethylene a year, the sources said.

Saturday’s 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, citing people familiar with the matter.

Motiva Chief Executive Brian Coffman last month said the company had yet to win approval for its major expansion projects.

Other U.S. companies, including Chevron Phillips Chemical Co [CHEPH.UL] – 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.

Exxon is separately proposing to build with another Aramco unit, Saudi Basic Industries Corp 2010.SE, a $9 billion petrochemical plant near Corpus Christi, that would process ethane.