ExxonMobil Corporation’s (XOM) share price rose by 1.7% for two consecutive sessions to touch $104.38 per share following the company’s announcement of having commenced the construction of a multi-billion dollar ethane cracker at its Baytown, TX, complex and related premium product facilities in neighboring Mont Belvieu.
The steam cracker is projected to have a capacity of about 1.5 million tons per year and supply ethylene feedstock for downstream chemical processing, including processing at two new 650,000 tons per year high performance polyethylene lines at the company’s Mont Belvieu plastics plant.
The project is expected to generate employment for around 10,000 construction workers, create 4,000 related job vacancies in neighboring Houston communities and augment permanent positions by 350 at the Baytown complex. To support the need for skilled workers for the project, ExxonMobil has allotted $1 million to the Community College Petrochemical Initiative.
The regional activity will also receive a boost by around $870 million per year and it will garner over $90 million per year of additional tax revenues for local communities.
ExxonMobil has already given out the contracts for construction, which will begin with immediate effect. Contracts for construction of the new olefins recovery units have been given to Linde Engineering North America, Inc. and Bechtel Oil, Gas, and Chemicals, Inc., while Mitsui Engineering & Shipbuilding Co, Ltd. and Huertey Petrochem S.A. will be responsible for construction of new olefins furnaces.
Mitsubishi Heavy Industries will construct two 650,000 tons-per-year high-performance polyethylene lines at the Mont Belvieu Plastics Plant. The enabling works and interconnections at both locations will be supervised by Jacobs Engineering, Ltd. Dashiell Corporation and Wood Group Mustang will offer specialty contracting services.
ExxonMobil’s expansion, together with its global sales and technology support network, helps ExxonMobil Chemical to meet the rising demand for high-value polyethylene products. The production of these high-quality petrochemical products used in a wide range of consumer and industrial applications is anticipated to begin in 2017.
Currently, ExxonMobil carries a Zacks Rank #3 (Hold). Investors interested in the same sector could consider stocks like Encana Corp (ECA), Magellan Midstream Partners LP (MMP) and Ultra Petroleum Corp. (UPL), all of which sport a Zacks Rank #1 (Strong Buy).
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