ExxonMobil Chemical eyes further growth opportunities in Asia
April 9, 2019
ExxonMobil Chemical will continue to study growth opportunities in Singapore and the rest of Asia to further enhance its product slate, its newly appointed president Karen McKee said.
“We’ll always look at opportunities in Singapore in line with the competitive advantages that we have here,” she told ICIS.
The company officially opened on 5 April its 90,000 tonne/year resins plant as well as its 140,000 tonne/year butyl plant on Jurong Island in Singapore.
The ability to directly crack crude oil at its Singapore site gives the company greater feedstock flexibility for the two new units.
“So if you have an ethane cracker it almost only makes ethylene whereas if you take a heavier molecule then you start you get a broader array of chemicals out of that. So yes, we get more feed for these two new derivative investments by nature of having the capability to directly crack crude,” McKee said.
Singapore is home to ExxonMobil’s largest integrated refining and petrochemical complex in the world.
“We’re committed to invest in Singapore and committed to bring our best proprietary technology to Singapore,” she said.
McKee assumed her new position at ExxonMobil Chemical on 1 April. Prior to her appointment, she was the senior vice president for basic chemicals, integration and growth of the company.
“We’re also evaluating and studying potential growth opportunities in Guangdong in China and also in Sriracha in Thailand,” she said.
ExxonMobil had signed in September 2018 a cooperation framework agreement with the provincial government of Guangdong in southern China, to advance construction of a chemical complex in the Huizhou Dayawan Petrochemical Industrial Park.
The proposed multibillion-dollar project would include a 1.2m tonne/year flexible feed steam cracker, two performance polyethylene (PE) lines, and two differentiated performance polypropylene(PP) lines, with start-up in 2023.
In Thailand, ExxonMobil operates the Esso Sriracha Refinery in Chonburi province with a maximum rated capacity of 174,000 bbl/day.
For now, ExxonMobil is focused on starting commercial production at its new halobutyl rubber plant in Singapore in the second half of 2019. On-spec output was achieved at the unit in May 2018, while works on “functional equivalency” are under way, McKee said.
“When that functional equivalency work is complete, we expect to start that facility back up in the second half of this year to serve the market,” McKee said.
Meanwhile, ExxonMobil’s new Escorez hydrogenated hydrocarbon resins plant in Singapore – which has been in commercial production since December 2017 – is expected to meet long-term demand growth for hot-melt adhesives used in packaging and diapers.
The new production units will mainly cater to Asia, where a growing middle-class population will boost demand for specialty products, according to McKee.
ExxonMobil is currently on track to double its chemical earnings by 2025, underpinned by investments in Asia and the US.
Its growth plan listed 13 new chemical units, including two new steam crackers in the US, as part of its goal to increase chemical manufacturing in the Asia Pacific and North America by 40% through 2025.
“Demand for the chemicals that we make is higher than GDP [growth]. Demand for our products should increase by about 45% over the next decade, or by 4% per year,” she said.
The global economy is projected to post a slower growth of 3.5% in 2019 from 3.7% in 2018, based on World Economic Outlook of the International Monetary Fund (IMF) in its latest World Economic Outlook. World GDP growth in 2020 is projected at3.6%.
“Some years [the growth] will be higher than others but… you know the demand will be there,” she said.
On uncertainties surrounding global trade which could influence chemicals demand, McKee said that ExxonMobil remains a “believer in global trade”.
“We value open trade and we value rules-based trade which is predictable and can support investment, so we’re always going to bias ourselves towards free trade,” McKee said.
“Any unpredictable or unfair changes and limitations on trade are always going to be a concern to us. Having said that, as a global company with multiple supply points we adapt to whatever environment we find ourselves in,” she added.
By Nurluqman Suratman
Source: ICIS News