Meanwhile, a wave of multibillion-dollar petrochemical plants are being built along the U.S. Gulf Coast to take advantage of cheap feedstock from the Permian to make plastic raw materials. The latest one to be announced is an $8 billion partnership between Qatar Petroleum and a Chevron Corp.-Phillips 66 joint venture.
That follows Exxon Mobil Corp. and Saudi Arabia’s state-controlled petrochemicals company formally approving construction of a new chemical complex in Texas last month. Demand for plastics is growing more than 4% a year, Chevron Phillips Chemical Chief Executive Officer Mark Lashier said.
Mexico Connection
A dispute between Mexico and pipeline companies threatens the much-needed relief valve for natural gas from the Permian, where the fuel is a byproduct of oil output. The country’s state-run power utility is considering about $3 billion in arbitration against pipeline operators in a tussle that could discourage investments.
That’s bad news for American drillers, who have looked forward to conduits coming online on time to haul stranded gas south of the border. Prices in the Permian have dipped into negative territory multiple times this year, meaning producers were paying customers to take their gas so they could keep the oil spewing.
Bloomberg News.