The Scottish Environment Protection Agency (SEPA) says it intends to submit a report to the Crown Office and Procurator Fiscal for consideration of prosecution over flaring at Mossmorran last year.
Unplanned flaring took place in April 2019 at the Fife Ethylene Plant.
The agency's pollution hotline received more than 900 complaints, which is the highest number it has ever received for any single environmental event.
ExxonMobil says it'll examine SEPA's communication after only receiving it this evening.
The firm insists it complies with all applicable laws, rules and regulations.
Chief Executive of SEPA Terry A’Hearn said: "Compliance with Scotland’s environmental laws is simply non-negotiable.
"Over a number of years, communities across Fife have repeatedly endured unplanned flaring.
"Whilst flaring is an important safety mechanism of such facilities, it must become the exception, rather than routine.
"People rightly expect that their lives won’t be impacted by nearby industrial processes and yet again, over an extended period during Easter 2019, communities were impacted by unacceptable and preventable flaring.
"The incident resulted in over 900 complaints to our Pollution Hotline, the highest number we’ve received for any single environmental event.
"Consequently, following an extensive investigation into the flaring at Mossmorran during April 2019, we intend to shortly submit a report to the Crown Office and Procurator Fiscal Service for consideration of prosecution.
"It’s right that we take enforcement action for the Easter 2019 flaring event."
A spokesperson for ExxonMobil said: "Having only received the communication from SEPA late this evening, we will now take the time to fully consider its content.
"Wherever we operate, we comply with all applicable laws, rules and regulations."