According to a U.S. environmental filing, Exxon Mobil Corp intends to construct a chemical factory in Texas in order to benefit from cheap gas because U.S. natural gas prices have declined by over 20 percent this year.
The world’s largest publicly traded energy company would increase its chemical production capacity to compete the largest U.S. chemical maker, Dow Chemical Co. Since its 2010 acquisition of XTO Energy Inc., Exxon Mobil has become the biggest natural gas producer in North America. Exxon Mobil will be able to reduce its costs by using its own natural gas for production of chemicals. Dow is unable to do so since it doesn’t drill.
The company’s decision to construct the new plant follows recent announcements by LyondellBasell, Royal Dutch Shell Plc, Dow as well as others to increase their U.S. chemical production.
Low U.S. natural gas prices have provided U.S. producers an edge over Asian and European who need crude oil-derived naphtha in order to produce chemicals. Exxon Mobil’s plant will be constructed at the company’s existing Baytown complex and it will produce 1.5 million tons of ethylene per annum, a key raw material for plastics production.Previous Post » Caterpillar, Exxon Mobil and Intel Corp Turn Out to be Top Falls of the Day