OxyChem and Mexichem Announce Construction is Underway on Their Joint Venture Ethylene Cracker Project in Ingleside, Texas

OxyChem and Mexichem announced that construction of its ethylene cracker at OxyChems Ingleside, Texas, complex is underway.

December 17, 2014

Ingleside, Texas (December 17, 2014) Ingleside Ethylene, LLC, the 50/50 joint venture between Occidental Chemical Corporation (OxyChem) and Mexichem, S.A.B. de C.V., today announced that construction of its ethylene cracker at OxyChem’s Ingleside, Texas, complex is underway and the project remains on schedule to become commercially operational in the first quarter of 2017.

Senior management from both companies and Texas Land Commissioner-elect George P Bush, participated in a ceremony to celebrate the symbolic groundbreaking of the new ethylene cracker.

Construction of the cracker began in the second quarter of 2014. When completed it will have 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 project will create approximately 1,700 jobs at peak construction and generate more than 150 permanent jobs. OxyChem will operate the cracker upon completion.

“The ethylene cracker is a significant project 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,” said Robert Peterson, President of OxyChem.

“The Oxy-Mexichem joint venture is a vital part of our strategy to become a global vertically integrated specialty chemicals company with a focus on high-end products. Once operational, this cracker will provide a steady supply of ethylene, a key raw material for many of our most important products. We look forward to working with OxyChem in the coming years to complete the project”, said Antonio Carrillo, Chief Executive Officer of Mexichem.

Total investment in the project will be approximately $1.5 billion. In December 2013, Ingleside Ethylene, LLC awarded CB&I the engineering and construction

contract to build the cracker. In May 2014, the plant received necessary permits for construction to begin from the U.S. Environmental Protection Agency (EPA) and Texas Commission on Environmental Quality (TCEQ).