ExxonMobil Chemical said Monday it will increase polyethylene capacity at its Beaumont, Texas, petrochemical complex by 65%, with new resin production expected to come online in 2019.
Construction has already begun. Once complete, the project is expected to add 650,000 mt/year of new polyethylene to the Beaumont complex, which currently has capacity of 1 million mt/year, the company said in a statement.
"The availability of vast new supplies of US shale gas and associated liquids for feedstock and energy is a significant advantage that enables expansion to meet strong global demand growth in polyethylene," Cindy Shulman, vice president of ExxonMobil's plastics and resins business, said in Monday's statement.
It was unclear Monday which grades of polyethylene would be included in the expansion.
ExxonMobil Chemical could not immediately be reached for comment.
ExxonMobil produces high density, low density and linear low density polyethylene at the complex.
The Beaumont project is the latest planned by ExxonMobil in the US Gulf Coast region as it looks to take advantage of cheaper natural gas liquid feedstock, and is similar to polyethylene lines being constructed at its Mont Belvieu Plastics Plant in Texas, the company said.
Combined, the projects are expected to add about 2 million mt of new capacity to increase ExxonMobil's US polyethylene production by about 40% and make Texas the company's largest polyethylene supply point.
Last month, ExxonMobil said it is continuing to evaluate building a 1.8 million mt/year ethylene-capacity steam cracker on the US Gulf Coast with Saudi Arabia's Sabic, but had not reached a final investment decision.
Sites in Texas and Louisiana are under consideration. The project would also include polyethylene capacity.
If the companies decide to move forward, the new complex would be unlikely prior to 2023, per market feedback.
The first wave of new polyethylene capacity in the US and Canada is expected to begin coming online in the first quarter, per market sources, as production in Mexico has ramped up throughout 2016.
Platts Analytics forecasts new North American capacity to increase by almost 6 million mt through 2019, with that total increasing to more than 8 million mt through the end of its current forecast period in 2026.
