Port Arthur is on track for a significant economic upheaval as the Houston-based energy supergiant Chevron plans to potentially build a $5 billion ammonia production facility in the city. If it moves forward, construction is slated to begin in 2027.
Called Project Labrador, the facility would produce, convert and store low-carbon hydrogen and ammonia for use in energy production activities. The company may also build a future ammonia export terminal adjacent to the facility.
The federal government has already provided $1.2 billion to advance the project as part of an ongoing effort to support hydrogen hub development across the nation. In the federal grant filing, a Houston-based consortium of companies – including Chevron – was listed to receive funding to create a regional hydrogen network.
The Gulf Coast Hydrogen Hub initiative will be essential to initiate large-scale hydrogen production to support the clean hydrogen economy. The network would leverage water use through electrolysis and natural gas and carbon capture and storage to lower the cost of hydrogen. Full deployment would lead to approximately seven million metric tons of greenhouse gas emissions being avoided each year.
While Port Arthur has been identified as a preferred site for construction, Chevron has not yet made a final decision on the project’s location. There are currently five other sites in the running across the U.S. that may be home for Project Labrador.
Should the agreement be signed, The Port Arthur Independent School District would limit the facility’s taxable value for a decade of maintenance and operations taxes. Excluding the incentives, Chevron would pay more than $3 billion in local taxes over a 40-year span, increasing the state’s gross domestic product by approximately $65 billion and the state’s earnings by $7 billion over that time.
Once completed, the ammonia production facility would create 50 permanent jobs and generate 1,700 construction jobs.
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