The city of Orange, Texas is on the short list of places where Chevron Phillips Chemical is considering building a massive $5 to $6 billion petrochemical expansion, reported the Association of Chemical Industry of Texas.
For months, the company’s owners, Phillips 66 and Chevron, have said they are considering adding more capacity in the region without saying where or how big of a project it could be.
A request for tax incentives filed with the state comptroller's office shows Chevron Phillips is considering buying 1,700 acres of undeveloped land to house a multi-billion manufacturing facility in Orange.
The project would convert hydrocarbons into ethylene which can be converted into polyethylene plastic pellets, the building block for packaging thousands of consumer goods, including milk jugs, bags, food and beverage containers, household chemicals and detergent bottles.
The proposed location is across a highway from Chevron Phillips’ existing polyethylene plant on Farm to Market Road 1006. Construction could start as early as the second quarter of 2020 and the company would start operations in the third quarter of 2024.
Orange is one of several locations in Texas and Louisiana that Chevron Phillips has considered for their new investment.
“At this point in time, Orange, Texas, is a finalist undergoing due diligence for a new petrochemical investment if we make a final investment decision to proceed. However, the location is only one of the alternatives we are considering along the U.S. Gulf Coast,” said a Chevron Phillips Chemical spokesperson. “It would simply be premature to say that Orange is definitively where we would put a new petrochemical facility if we decide to build one.”
The company is eyeing the investment roughly a year after starting up its new ethane cracker in Baytown. A new petrochemical expansion on the Gulf Coast could create thousands of construction jobs and further cement the region's dominating role in an emerging export-driven U.S. petrochemical market.
“We remain very encouraged by the fundamentals supporting an additional petrochemical investment in the U.S. Gulf Coast. The availability of competitive feedstocks in the region and growing worldwide demand for our products appear to support such an initiative,” the company spokesman said.
The new project would generate 3,500 construction jobs at peak construction with an average salary of about $90,000, according to state documents filed in late January.
The number of permanent jobs for the project is unclear, but it’s likely a project of this scale would generate hundreds of new permanent jobs. A recently-completed project of the same scale in Baytown now supports 1,000 permanent employees and 2,000 contractors, according to Chevron Phillips Chemical.
The average salary for permanent jobs would be $80,000 annually, according to the documents.
The project would include an ethylene cracker, at least one ethylene derivative units, a rail storage yard, utilities and related infrastructure and administrative buildings, the documents said.Chevron Phillips is seeking Chapter 313 incentives from West Orange-Cove Consolidated Independent School District and Bridge City Independent School District, the two districts where its potential project would overlap.
