OxyChem and Mexichem Announce Startup of their Joint Venture Ethylene Cracker in Ingleside, Texas
Public Company Information:
INGLESIDE, Texas — February 27, 2017 — Ingleside Ethylene, LLC, the 50/50 joint venture between Occidental Chemical Corporation (OxyChem), a subsidiary of Occidental Petroleum Corporation (NYSE:OXY), and Mexichem, S.A.B. de C.V. (BMV:MEXCHEM), today announced that its ethylene cracker at OxyChem’s Ingleside, Texas, complex has begun operations on schedule and on budget. The ethylene cracker is currently in a production stabilization phase.
The cracker, which will be operated by OxyChem, has the capacity to produce 1.2 billion pounds (550,000 cubic meters) of ethylene per year and provide OxyChem with an ongoing source of ethylene for manufacturing vinyl chloride monomer (VCM), which Mexichem will use to produce polyvinyl chloride (PVC resin) and PVC piping systems. The companies have a 20-year supply agreement.
“We are pleased to announce the safe startup of the ethylene cracker at our plant in Ingleside. This is a significant milestone for both OxyChem and Mexichem, enabling us to capitalize on the advantages that shale gas development presents for the chemical industry. It also helps our companies better compete globally in our respective markets, and gives us an inherent advantage to manage the cost of ethylene,” said Robert Peterson, President, OxyChem.
“This is a great example of the excellent long-term partnership that Mexichem has with OxyChem, and we are proud that the ethylene plant was constructed safely, on time and on budget. The facility’s cutting-edge technology makes it one of the most modern in the world. For Mexichem, the ethylene plant is a vital part of our global strategy to become a vertically integrated specialty chemicals company with a focus on high-end products,” said Antonio Carrillo, Chief Executive Officer, Mexichem.
The project also includes a pipeline and storage facility at Markham, Texas. Total investment in the project was approximately $1.5 billion and the facility will provide 150 permanent jobs. Construction began in the second quarter of 2014. In December 2013, Ingleside Ethylene, LLC awarded CB&I the engineering and construction contract to build the cracker.
About Ingleside Ethylene, LLC
Ingleside Ethylene, LLC is a 50/50 joint venture formed in October 2013 to construct a 1.2-billion-pound per year capacity ethylene cracker in Ingleside, Texas. OxyChem, based in Dallas, Texas, manufactures and markets basic chemicals, vinyls and other chemicals used in water treatment, paper production, pharmaceuticals, construction, automobile manufacturing, soaps and disinfection products, among other applications. OxyChem is the No. 1 producer of VCM worldwide. Mexichem is one of the world’s largest chemical and petrochemical companies and a leader in the manufacture and supply of plastic piping, contributing to global development by delivering an extended portfolio of products to high-growth sectors such as infrastructure, housing, datacom and water management. With operations in over 30 countries worldwide and more than 18,000 employees, Mexichem has annual revenues of US$5.4 billion and has been traded on the Mexican Stock Exchange for over 30 years. For more information about OxyChem visit www.oxychem.com and to learn about Mexichem visit www.mexichem.com.
Portions of this press release contain forward-looking statements and involve risks and uncertainties that could materially affect expected results. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental's specific products; higher-than-expected costs; general economic slowdowns domestically or internationally; political conditions and events; litigation; or changes in law or regulations. Words such as “estimate,” “predict,” “will,” “expect,” “begin” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements, as a result of new information, future events or otherwise. Material risks that may affect results appear in Part I, Item 1A “Risk Factors” of the 2016 Form 10-K.