SABIC-Exxon joint venture hires ahead of 2022 startup

Saudi Basic Industries Corp., more commonly called SABIC, has already started hiring for a $10 billion joint venture project set to come online in 2022.

In fact, Gulf Coast Growth Ventures — the joint venture entity for the project — has already hired almost all of its permanent workforce, said Bashar Asiri, leader of SABIC’s growth projects in the Americas. Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) is SABIC’s joint venture partner for the project.

GCGV is expected to create more than 600 permanent jobs, paying an average of $90,000 per year.

The project itself will create a massive plastics manufacturing facility in San Patricio County, Texas. It will include a 1.8 million-metric-ton ethane steam cracker, two polyethylene units and a monoethylene glycol unit, according to a press release announcing the final investment decision.

Those assets are slated to start up in 2022, but the venture may advance some of the units early — as soon as 2021, Asiri said.

The GCGV project has reached an advanced stage of construction, and the JV has already begun training its permanent employees and started getting them involved in the commissioning of the new assets, Asiri said.

Meanwhile, the construction period is expected to create jobs for 6,000 workers. The Wood Group, McDermott & Turner Industries Group, Chiyoda & Kiewit, and Mitsubishi Heavy Industries & Zachry Group are the four primary engineering, procurement and construction companies and joint ventures building the project.

Both Exxon and SABIC have a major presence in Houston. ExxonMobil Chemical’s headquarters are in the 385-acre campus that Exxon opened about three years ago in Springwoods Village, just north of Houston.

SABIC has been growing its existing regional headquarters for the Americas — at 2500 CityWest Blvd. office in the Westchase District — over the past several years and is considering building a new U.S. headquarters in the Katy area. The company had no updates to provide regarding that headquarters decision.

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Broad Reach Power plans move to downtown Houston

Houston-based Broad Reach Power LLC plans to move into a new office in downtown Houston.

Broad Reach currently is located in temporary space in the Galleria area, but it will move to an office at Three Allen Center in the first quarter of 2021, said CEO Steve Vavrik. The company just signed the lease in August, securing 8,900 square feet of space in the downtown office building, which is undergoing renovations.

Broad Reach employs 29 people total, 19 of whom are based in Houston. Over the next year, Vavrik said he could see his company adding eight to 10 employees in Houston.

The company has been growing lately and taking on larger projects as well. Broad Reach develops and operates utility-scale battery facilities in Texas, California and the Pacific Northwest. Right now, it has two operational battery assets at 10 megawatts each, both in Texas. But the company just started construction on two new assets in Texas, this time at 100 megawatts each.

Houston is an important place for Broad Reach because its talent pool gives the company access to the kinds of people it needs to make those projects work, Vavrik said.

“You’ve got a great talent pool of people who know how to do this,” Vavrik said. “When we were looking around — and we looked at other large metro areas — (we decided) it’s going to be easier here, we’re going to find the talent available.”

On top of that, the drop in oil prices has pushed many Houstonians in that industry now to consider deploying their expertise in Broad Reach’s line of work, Vavrik said.

“The majority of our new hires either were already part of the renewable sector or were part of the energy sector and said ‘I’m interested in taking my skills and being part of the transition,’” Vavrik said.

Broad Reach is backed by investments from two private equity firms — EnCap Investments LP and Yorktown Partners  LLC — alongside another investment from Mercuria Energy, according to its website. Right now Broad Reach is developing its assets using funding from its backers, though Vavrik said it could eventually rely on its own balance sheet for growth once it gets more cashflow coming in.

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Braskem completes $750M polypropylene project in La Porte

Brazil-based Braskem SA (NYSE: BAK) has started up a new polypropylene production line in La Porte, putting an end to construction that created work for over 1,000 people.

The new line, dubbed Delta, has a production capacity of 1 billion pounds per year, according to a press release. It represents nearly three years of labor by about 1,300 development and construction workers as well as a $750 million investment by Braskem. Now that construction is complete, Braskem employs 50 people to support commercial operation of the plant.

That $750 million figure is up from the company’s original expectations. Back in 2017, the company expected the project to cost about $675 million, according to press releases at the time.

Braskem America CEO Mark Nikolich said in the latest press release that Delta is the largest polypropylene production line in North or South America.

“The completion of this plant really affirms our polypropylene leadership in North America, and that was our intent,” Nikolich said during a virtual press conference on Sept. 11. “It’s a very large line.”

Braskem started construction in September 2017 during the aftermath of Hurricane Harvey. The project was completed in the aftermath of Hurricane Laura and amid the Covid-19 pandemic.

“I consider this a miracle project,” Nikolich said.

Braskem originally decided to site the project in La Porte for a number of reasons — it had space in its existing facility there, and the region was ripe with feedstock for the plant with strong pipeline connectivity, Nikolich said in a 2017 interview with the Houston Business Journal.

The decision was not driven by tax abatements or other government incentives, and the Delta project doesn’t have any incentives associated with it, Nikolich said at the time.

By Joshua Mann, Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/09/11/braskem-completes-la-port-polypropylene-project.html

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Bruin E&P exits bankruptcy ahead of schedule with $230M exit facility

Houston-based Bruin E&P Partners LLC emerged from bankruptcy Sept. 3 freshly trimmed of old debt.

Bruin originally petitioned the Southern District of Texas Bankruptcy Court for Chapter 11 protections on July 17. That means it is now emerging after a relatively brief 48 days in the court — beating its original plans by a full week with nearly unanimous support from its creditors.

“Bruin has been able to undergo an extremely efficient and uncontentious Chapter 11 proceeding due to the support of our stakeholders,” CEO Matt Steele said in a press release.

Bruin used the bankruptcy process to cut $840 million in debt, turning all its ownership interest over to creditors in exchange.

In addition to the new ownership, Bruin emerged from bankruptcy with $230 million in exit financing and a new board of directors. The new directors are Steele, Kevin Asarnow, Mark Bisso, Richard Doleshek and Mike Wichterich.

Bruin’s bankruptcy had its roots in an unfavorable borrowing-base redetermination earlier this year. The lenders for Bruin’s reserve-based loan cut the borrowing base under the credit facility from $710 million to $400 million in April, putting the company $110 million into overdrawn territory as a result, Steele said in a declaration to the court early in the bankruptcy process.

Bruin is far from the only oil and gas company to turn to the court as a means of remedying its financial situation. Exploration and production companies like Bruin have had to contend with plunging demand for their products due to social distancing as a response to the Covid-19 pandemic.

Just in the past few weeks, both Arena Energy LP and SAExploration Holdings Inc. have filed for bankruptcy in the Houston court, and 2020 in general is shaping up to be a hot year for such petitions.

In total, 34 oil and gas companies filed for bankruptcy in the Southern District of Texas during the first seven months of 2020, according to data published by Haynes and Boone LLP. That’s more than in any full year since 2016, and it’s just four cases short of the first seven months of 2016.

Measured by total debt brought before the court, 2020 has already reached above $65 billion, well over any other full year since before Haynes and Boone began recording the data in 2015. The closest was in 2016, when just under $47 billion was recorded for the full year. But there are still five months left in 2020 for which the latest report doesn’t yet account.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/09/03/bruin-ep-exits-bankruptcy.html

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Happy Labor Day Weekend! Time to fire up the grill!

This weekend we celebrate American labor and the contributions of our hard working citizens to the development and achievements of our amazing country. We wish you, and your family, a blessed weekend of celebration and relaxation. That being said, we are always ready to support your needs be they pumps, seals, or field service work.

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