Saudi’s Motiva could revive its shelved multibillion-dollar plastics project

By Arya M Nair, Official Reporter
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Motiva Enterprises, a fully-owned affiliate of Saudi Aramco, eyes to begin a multibillion-dollar expansion project at its Texas Gulf Coast refinery in 2023, producing petrochemicals used in everything from plastic water bottles to shopping bags.

Before the project was suspended over two years ago, engineering and excavation work had already been completed. According to sources, Saudi Aramco’s US refining unit is considering reactivating the project, except for an ethane cracker, which it no longer requires.

Motiva had planned to build an ethane cracker that would produce ethylene, a major component in the production of plastics and solvents, as well as other downstream processing units. The refiner stopped the project after buying Flint Hills Resources LLC’s chemical plant in late 2019, which provided it with an ethane cracker but not all the downstream units needed to turn the ethyl.

Supply disruptions and pandemic-related demand have boosted demand for construction, manufacturing, and consumer products that rely significantly on the processing of chemicals such as ethylene.

Ethylene, which hit a seven-year high of $81.01 in March, has since fallen from its highs but has recently trended upward. According to Independent Commodity Intelligence Services (ICIS), a data and analytics service provider, the spot price recently was $0.38.

Another option being considered for Port Arthur involves Motiva buying another chemical factory in the area, allowing it to access downstream process units without having to build them. Motiva has been selling ethylene directly from its ethane cracker or shipping it to local chemical factories for further processing. Motiva’s 607,000 barrel-a-day refinery in Port Arthur, Texas, is the largest in the US.

According to reports, the initial project was valued at $6.6 billion in 2018. The ethane cracker, anticipated to cost $4.7 billion, accounted for the majority of the value.

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