Central Texas Iron Works already has played a part in Exxon Mobil’s grand plan to spend at least $20 billion expanding its petrochemical and refining operations on the Gulf Coast. With the oil giant announcing new plans to spend $50 billion on U.S. operations, the local steel provider hopes to land even more roles.
Exxon Mobil’s public pledge last week to pour billions of dollars into infrastructure upgrades in the wake of corporate tax cuts did not come as a surprise, said Curtis Cleveland, vice president of marketing at Central Texas Iron Works.
He said the local plant, which employs about 200 people, has been shipping steel to Baytown for more than a year, for a piece of Exxon Mobil’s previously announced $20 billion Growing the Gulf projects.
“The Baytown work involves Exxon Mobil’s chemical complex, and it has represented about 20 percent of our backlog, but we’re almost through shipping now,” Cleveland said.
The company is now bidding on a chemical-complex project in Gregory, north of Corpus Christi, that is planned for two years out.
“We’re competing against the world for that contract,” Cleveland said.
The $9.3 billion project in Gregory represents a collaboration between Exxon Mobil and a Saudi company to build a large ethane steam cracker on a 1,400-acre site.
The plant would use heat and pressure to turn natural gas into ethylene and polyethylene, which are base materials for plastic, according to Exxon Mobil press releases.
Exxon Mobil CEO Darren Woods wrote in a blog post Monday that the company was in a better position to earmark $50 billion for projects throughout the United States thanks to “smarter regulation” and the corporate tax rate cut that President Donald Trump signed into law.
The corporate tax rate was cut from 35 percent to 21 percent.
“These are all possible because of the resource base developed by our industry along with sound tax and regulatory policies that create a pro-growth business climate here in the U.S.,” Woods wrote.
He went on to say Exxon Mobil plans “to increase oil production in the Permian Basin in West Texas and New Mexico, expand existing operations, improve infrastructure and build new manufacturing sites.”
About $35 billion of the $50 billion in spending is planned for new projects, an Exxon Mobil spokesman told the Houston Chronicle. The other $15 billion is tied to previously announced projects, including investments yet to come for the $20 billion, 10-year Growing the Gulf effort. Growing the Gulf includes 11 major refining and petrochemical projects expected to create 45,000 jobs, including construction jobs.
Cleveland said Central Texas Iron Works the past year has devoted resources almost exclusively to projects related to refining, chemicals and natural gas.
“I expect that to continue,” he said. “The economy is better, as is the regulatory environment. I believe every major oil and chemical company, just name a brand, will begin spending on infrastructure upgrades.”
That in mind, the company has started hiring 20 to 25 more welders, personnel director Jay Cockerham said.
“These are not people we are looking to lay off after our busy season,” Cockerham said. “These are permanent employees, keepers.”
He said Central Texas Iron Works has its own training program that allows hires to become certified in welding structural steel.
Central Texas Iron Works, located on Winchell Drive, was founded in 1910 as James T. Stubbs Foundery, making sash weights, grates and other items for the general public. It now is a subsidiary of the California-based Herrick Corp. and specializes in providing steel for major projects internationally, with demands ranging from 500 tons to 35,000 tons, according to its website.
Though Exxon Mobil officials said tax cuts influenced the company’s boost to spending plans, rising oil prices likely played a role, gasbuddy.com petroleum analyst Patrick DeHaan said. The spot price for crude has climbed above $60 a barrel this year from as low as $29 a barrel in January 2016.