Tax Break Clears Way for $10 Billion Texas Petrochemical Plant

March 22, 2017

Exxon Mobil and Saudi Basic Industries Corp., (SABIC) were given more than $460 million in tax breaks by the San Patricio County Commissioners on Monday, clearing the way for the two companies to begin construction on a $10 billion petrochemical complex north of Corpus Christi, Texas. The Gregory-Portland School Board voted 6-0, with one abstention, to approve tax abatements that would extend for more than 15 years Tuesday night

The chemical plant, the largest proposed in Texas, would create an estimated 11,000 construction jobs and 600 permanent ones and feature the world’s biggest ethane cracker, which processes a component of natural gas into ethylene, the primary building block of most plastics. Exxon Mobil and SABIC have not yet given the project the green light, but are likely to now that they have the tax breaks in hand.

If built, the plant will be located just outside the city limits of Portland and Gregory. Residents of the area voiced strong opposition to the project, fearing the development could negatively impact  the communities, which together have fewer than 20,000 residents.

“I’ll get out of here,” said Tim Flinn, a school board member who opposed the project, but recused himself from the vote because he lives less than a half-mile from the site and could stand to benefit financially because Exxon would guarantee the value of his home if he opted to sell. “It’s not going to be the quiet little place it was before.” Local business leaders argued that the project would boost jobs, the economy and the tax base.

Board members who voted for the tax breaks said they did so because they wanted to see the schools and communities get something out of the development. The school board could only prevent the tax break, not the project itself. Even with the abatements the schools would still receive an extra $1.6 million a year on average for more than 15 years to support their programs.

However, the tax votes do not guarantee the project will come to fruition. The next step for Exxon and SABIC is getting permitting in place. Exxon project executive Rob Tully said the company was encouraged by the vote and hopes to start filing permits for the project by April. “We can’t put a stick of steel in the ground until we get a permit,” Tully said.