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ExxonMobil ramps back up construction on $500M expansion after pause

October 21, 2021

After hitting the pause button during the beginning of the coronavirus pandemic, ExxonMobil is back on track to open its $500 million polyolefin expansion by the end of 2022. 

The company began in 2019 and expected to complete construction this year but demand for vehicles plummeted and ExxonMobil slowed construction on the project until the market began to recover. ExxonMobil was expanding to sell plastic to automobile parts manufacturers but as more workers stopped commuting demand for new vehicles dropped. 

It has hundreds of construction workers still on site and is wrapping up hiring 45 workers to run the plant. The new polypropylene unit has capacity of 450,000 tons each year at full capacity in 2025.During the shutdown phase of the pandemic the company kept some construction workers on site to keep the project moving along at a slower pace. 

"We were at about half speed but there's a lot of people in our company now saying we should have never slowed that project down," said Travis Fuller, ExxonMobil's chemicals project venture executive. "The demand for polypropylene is going through the roof." 

Polypropylene and polyethylene is used as a raw material in manufacturing lightweight plastics, some of which end up as fibrous materials such as surgical gowns or baby diapers. Other final products range from an insulated recyclable foam coffee cup to super lightweight vehicle parts. Demand for polypropylene has been driven by a growing middle class overseas, particularly in Asia. Food-grade plastic film is one driver in particular that enables longer shelf life of consumer products.

Global demand for this project has been growing at a rate where the company could build six of those plants each year through 2030, according to Exxon. The company is about 68% done with construction. 

The raw materials for the products come through pipelines from ExxonMobil's chemical complex just north of downtown Baton Rouge. Then the polyolefin plant turns those gases into tiny solid pellets known as nurdles.  "Everything we make turns into a plastic pellet and leaves in a hopper car," said Stephen J. Hamilton, ExxonMobil Baton Rouge Polyolefin plant manager. "One of the reasons that plastic plants are built near refineries is because that's where we get our feed." One pound of the white plastic nurdles has 18,000 pellets. Each railcar can hold up to 200,000 pounds of plastic 

Turner Industries and Jacobs Engineering, which is now Worley, handled the engineering, procurement and construction contract. Exxon contracted out locally for its concrete, trucks and steel fabrication at the site among other contracts. 

ExxonMobil is expected to get a tax break worth $31.7 million over a 10 year period through the Industrial Tax Exemption Program which is an 80% abatement. 

ExxonMobil has spent more than $330 million across 35 local contractors and businesses in Louisiana since 2019. 

By Kristen Mosbrucker, The Advocate