ExxonMobil officials have pulled the trigger on an estimated $410 million modernization project that will make its Baton Rouge Refinery more competitive and position it for a potential major expansion in the future.
The project would enable the processing of additional types of crude oil, while reducing environmental emissions at the site — first built in 1909. Construction is expected to begin later this year.
ExxonMobil has pegged its capital investment as worth at least $240 million, the portion that is eligible for tax breaks, but total estimates place the cost of the project at roughly $410 million.
ExxonMobil is hosting a virtual event next week to scout for a wider network of suppliers for its planned $410 million Baton Rouge refinery project.
There are no new permanent jobs tied to the project, but the company says that since the industry as a whole has been shedding jobs in recent years the investment will help protect existing jobs. As a result, it's estimated that 84 jobs at the refinery would not be lost over the next decade. ExxonMobil has 1,300 existing jobs, which include engineers, operators and technicians working at the refinery.
ExxonMobil expects to support 600 construction jobs over a three-year period.
The company has said it will spend $267 million with Louisiana suppliers and allocated $226 million of that in Baton Rouge.
ExxonMobil and its pre-engineering contractor have carved out $4.2 million to be spent with small and diverse businesses. The company already has engaged with 15 businesses owned by a diverse group of individuals to support its catering, marketing, supplies and consulting contracts. The company is still negotiating with several small and diverse suppliers for equipment purchases.
Baton Rouge-based Performance Contractors, ISC and Brand Scaffolding have been hired to work on the project.
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The company plans to hire up to two dozen graduates from its North Baton Rouge Industrial Training Initiative, who will be part of its craftsperson internship program and may be placed into full-time jobs ranging from electricians to machinists. There are nine craft interns already at the complex. The training program is tuition-free for north Baton Rouge residents.
“Through this investment, we will reduce the facility’s volatile organic compound emissions up to 10% while bringing direct value to the community through increased tax revenue and job opportunities for local residents and small and diverse businesses," said David Oldreive, the Baton Rouge Refinery manager.
ExxonMobil estimates it will generate $5.2 million in local sales tax revenue starting this year during construction. Over a 10-year stint, an economist hired by the company estimated that the project will generate an additional $9 million in local sales taxes. In terms of local property tax revenue, the company estimates $43.4 million will be paid "over the life of the project."
The project would generate $6.7 million for the Sheriff's Office, $20 million in property taxes for East Baton Rouge Parish and $21.9 million for the East Baton Rouge Parish School District.
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In exchange for the economic development project, the East Baton Rouge Parish school board, metropolitan council and the sheriff's office approved an 80% property tax break for 10 years worth $20 million in exchange for $230.5 million in upgrades eligible for the Industrial Tax Exemption Program. That doesn't include safety and environmental work.
ExxonMobil also is expected to use the state's FastStart workforce development training program.
“ExxonMobil is an economic driver in East Baton Rouge, supporting thousands of residents with quality jobs, strategically partnering with local companies for procurement needs, and injecting millions of dollars into public services,” Sharon Weston Broome, mayor-president of East Baton Rouge, said in a news release.
The ExxonMobil Refinery is part of an integrated refining and petrochemical complex providing fuels, lubricants and wax products to customers around the world.