ExxonMobil and SABIC have announced that they will proceed with the construction of a chemical facility and a 1.8 million metric ton ethane steam cracker in San Patricio County, Texas.

In a joint statement, Exxon Mobil and SABIC said that the project near Corpus Christi will be the world’s largest steam cracker and create $50 billion of economic output in the first six years.

Yousef Al-Benyan, SABIC Vice Chairman and CEO, said, “This project will not only increase global diversification for our company but will also continue to create value within our new home of San Patricio County through creating jobs and supporting economic growth.”

The joint venture between ExxonMobil and SABIC, called Gulf Coast Growth Venture, will benefit from ultra-cheap production from the Permian, the world’s largest shale basin. As explorers boost oil output, associated supplies of gas and liquid byproducts provide some of the cheapest chemical feedstocks in the world.

“Building the world’s largest steam cracker, with state-of-the-art technology, on the doorstep of rapidly growing Permian production gives this project significant scale and feedstock advantages,” said Darren Woods, Exxon’s Chief Executive Officer.

Plastics and chemicals are seen as increasingly vital to big oil’s future given uncertainty over crude demand and the push toward electric vehicles and cleaner energy sources. But some of the world’s most-advanced economies are increasingly clamping down on single-use plastics such as shopping bags and straws.

For SABIC, 70 per cent-owned by the Saudi government, it’s the first joint venture with Exxon outside its home country and first big project along the Gulf Coast.

The facility will produce materials used in the manufacturing of various consumer products including automotive coolants, packaging as well as agricultural film and building, construction materials and clothing.

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