It's been nearly three years since ExxonMobil Baton Rouge Refinery Manager Gloria Moncada started trying to win approval for a new expansion project that would elevate the refinery to a new level of modernization and competitiveness.
"It's been sent back to the drawing board twice because we haven't been able to make it attractive enough," Moncada said.
Exxon's management committee in Dallas will make a final decision on the fate of the expansion project in early 2021. She sees the most current attempt for approval as a "last go" for the project.
"This is the last go because the project has to be done during a major turnaround," Moncada explained during an online meeting presented by the Louisiana Chemical Industry Alliance (LCIA). "And turnarounds don't just happen whenever. They're planned, and they're big events; sometimes there's 10 years between some of these turnarounds. Every time the project is rejected, we try to push the turnaround period so that we can cling to the project. But this is now our last hurrah. If it doesn't pass during the first quarter, we will not get it. We will miss the turnaround's window."
Conducting the expansion during the turnaround gives ExxonMobil the opportunity to add new technology into the part of the Baton Rouge refinery that reduces VOC emissions by 10 percent across the entire site.
"That is a massive, one-step movement in emissions from the plant," Moncada said. "It's entirely voluntary, and we have kept that inside the project despite all the cuts we've had to make to the project to make it attractive."
That budget concession is one that planners have "clung to," Moncada said. "We know it's the right thing to do, and it's a unique opportunity to do it. It also touches the dock facilities as well, helping to modernize [them] so that we can move ships more competitively than we can today."
Moncada said the expansion is critical to the refinery because it helps remove some of the disadvantages of operating in Louisiana.
"It lets us get to and run some of these less-expensive crudes more attractively into Louisiana than we can today, so it helps to close some of that gap. It helps level the playing field versus competitors along the Gulf Coast and in Texas," she said. "If the refinery's costs are disadvantaged, by definition the chemical plants' costs are disadvantaged because we, the refinery, produce the feedstock into the chemical plant through our process. If we're not the lowest cost to produce, we're not competitive in our cost to produce, then even our chemicals operation becomes disadvantaged. So this project, helping to bring back and restore the competitiveness, will also set a foundation for the chemical plant to be able to attract its next number of projects because it will be an attractive, integrated complex to keep investing in."
Moncada said planners have already cut millions of dollars from the expansion budget and are relying on being granted an Industrial Tax Exemption Program (ITEP) incentive.
"The ITEP incentive is an absolute make-or-break on this project," Moncada said. "There is no more 'We can cut off of this project without crippling what the project's objective is.' ITEP helps make this project more attractive to build in Baton Rouge instead of doubling down and adding additional facilities to our Texas sites."
Gregory Bowser, president and CEO of LCA and LCIA, moderated the discussion.
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