Wednesday, October 25, 2017

6 Reasons Why Exxon/Mobil Will End Up at Dilles Bottom, OH

ExxonMobil is looking for a site to build a cracker plant in the Appalachian Basin.  I know a number of people who have spoken directly with ExxonMobil individuals.  It seems ExxonMobil has been looking for about a year.  Initially, they were under the radar for most individuals, but now everyone knows about it. Despite all of ExxonMobil’s efforts to find a site, all indicators show ExxonMobil will end up at Dilles Bottom where PTTGC has prepped the site, but not made a final decision.  It appears the decision is continually delayed which means PTTGC will not end up there.

There are six compelling reasons why ExxonMobil will end at Dilles Bottom:

  1. PTTGC is having a difficult time getting financing. PTTGC wants to partner with other Asian chemical companies, but these companies are bigger than PTTGC and they want to be the lead company in the cracker plant.  PTTGC is committed to being the lead company but may not be able to finance it.
  2. PTTGC is concerned about finding workers. I’ve been told that PTTGC is delaying its decision because they want to wait until the Shell cracker plant is almost completed so the workers can migrate from the Shell cracker plant to PTTGC’s cracker.
  3. The PTTGC’s leadership will find building the cracker plant at Dilles Bottom too big a leap for the company.
  4. Hurricane Harvey has damaged not only the cracker and petrochemical plants in Houston, but it also damaged the manufacturing facilities of the companies that build the machinery used in cracker and petrochemical. Many of the cracker and petrochemical expansions have been slowed or halted after the hurricane. The machinery that was being made for the expansions are going to replace the damage machinery in existing plants.
Cracker plant machinery is in very high demand and current U.S. customers will get first priority.  It could take years for PTTGC to get cracker plant machinery. ExxonMobil is a major customer for many of the machinery manufacturers which mean it will get first priority.  If ExxonMobil takes possession of the Dilles Bottom site, it will go to the front of the line for machinery.
  1. Hurricane Harvey has made it extremely obvious that the petrochemical industry cannot be concentrated in the Gulf. Even Secretary of Energy Perry has commented that we (the country) cannot afford to have all of our eggs in one basket (the gulf).   The petrochemical industry will be moving as fast as possible to build redundant manufacturing in the Appalachian Basin.
  2. ExxonMobil’s primary global petrochemical competitor is Shell. Consequently, it cannot allow Shell to manufacture chemicals at its Monaca facility with a huge price advantage.  I’ve been told ‘in the petrochemical industry market share is more important that price’.  With its considerable price advantage, Shell could become the market leader.

ExxonMobil needs to be in the Appalachian Basin

To some this hypothesis is outlandish.  If you work in petrochemicals and are aware of what’s happening in the Appalachian Basin, I would appreciate your perspective on how likely is ExxonMobil’s purchase of the Dilles Bottom site. Joseph Barone President Shale Directories, LLC

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