Saudi Arabia Oil Company Looks To Invest $6B In Texas Gulf Coast

PORT ARTHUR, TEXAS — The Houston subsidiary of Saudi Arabia's national oil company is considering investing upwards of $6.6 billion at its Port Arthur refinery toward growing its petrochemical business, according to reports.

According to documents filed with the Texas Comptroller's Office, Motiva Enterprises LLC, owned by Saudi Aramco, is contemplating building a $4.7 billion steam cracker to produce ethylene, a chemical used to produce the most widely-used plastic, polythylene, along with other petrochemicals, the Houston Chronicle reported.

Additionally, Motiva is evaluating construction of a $1.9 billion complex that would produce benzene and paraxylene, byproducts of gasoline production, according to additional documents, according to the report.

Assuming the company secures necessary permitting, the report indicates, both projects would be complete by 2022. If the company decides to undertake the projects, expansion could potentially create thousands of construction jobs while elevating the company's profile in the petrochemical industry, the Chronicle noted.

Documents filed with state regulators dates to late November, but more recent added documentation reveal new details and a potential timeline for the projects. According to the filings with the comptroller's office, Saudi Aramco has yet to decide whether it would build the petrochemical plants in Port Arthur or other locations in Texas and Louisiana.

Concurrent to revealing its plans, Motiva filed for tax incentives from the Port Arthur Independent School District in connection to the projects, the Chronicle reported, but the petitions weren't publicly available on the state comptroller's website until this week. The term "tax incentives" generally refers to tax abatements that would allow for a partial payment of property taxes in return for capital investment and job creation in the area being considered for expansion.

A Motiva spokesperson told the newspaper the company is "...actively exploring several opportunities along the Gulf Coast." She added that final investment decisions by the board of directors are not expected to be made until the end of 2019, and are contingent on economics, "competitive incentives" and support from regulators.

Assuming such board endorsement, construction of the steam cracker would begin in the first quarter of 2020 while building the aromatics complex would launch in the second quarter that same year, according to the comptroller-filed documents. Both projects would be completed by the fourth quarter of 2022, the filings indicate.

The documents filed with the comptroller's office also indicate the petrochemical projects would collectively create some 4,300 construction jobs — 255 of those permanent — with an average salary of $80,000.

Apart from regulatory approval, it's unknown if the recent killing of a U.S. resident journalist in Saudi Arabia might pose as regulatory roadblock toward construction on the off chance U.S. economic sanctions are implemented in response. Just this week, Saudi Arabia's foreign ministry rejected a U.S. Senate resolution blaming Crown Prince Mohammad bin Salman for the murder of journalist Jamal Khashoggi. The office accused the decision of being “built on baseless allegations and accusations” and described it as a “blatant interference” in the kingdom’s affairs.

The Senate vote was taken despite a desire by Donald Trump to maintain close relations with the kingdom and its crown prince, despite growing evidence he ordered the killing of the journalist who had been critical of the Saudi government in his writings for the Washington Post. A U.S. resident, Khashoggi was killed inside the Saudi consulate in Istanbul on Oct. 2. He is believed to have been dismembered after his death, with the aid of a bone saw.

>>> Read the full story at Houston Chronicle

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