Sector News

ExxonMobil mulls cracker, PE and PP plants in China’s Guangdong

September 7, 2018
Chemical Value Chain

ExxonMobil is mulling a “multibillion-dollar” chemical complex in China’s Guangdong, which would include a 1.2m tonne/year flexible feed steam cracker as well as polyethylene (PE) and polypropylene (PP) units, the US energy and petrochemicals major said on Thursday.

Start-up date is expected for 2023, although the company warned the project’s realisation would depends on its future “competiveness”, as feedstock would need to come mostly from overseas.

Many new crackers in the US – including ExxonMobil’s 1.5m tonne/year ethylene plant that started up earlier this year in Baytown, Texas – use ethane as feedstock.

Ethane has not been included in the Chinese government’s list imposing tariffs on US products as the trade war between the two countries rages on. The US is expected to announce yet more tariffs this week.

However, ExxonMobil’s proposed cracker in China can use other feedstocks, which may include propane, butane and naphtha – some of which are included on China’s tariffs list on imports from the US.

ExxonMobil has signed a cooperation framework agreement with the Guangdong provincial government to potentially build the complex in the Huizhou Dayawan Petrochemical Industrial Park.

The project remains subject to a final investment decision (FID).

“ExxonMobil’s decision to proceed with the project will be based on a number of factors, including receipt of permits and project competitiveness,” the US major said.

John Verity, president of ExxonMobil Chemical, said the signature of the agreement with Guangdong’s government showed the firm’s “interest in advancing this project from concept to completion”.

ExxonMobil also said it intends to participate in the development of the Huizhou liquefied natural gas (LNG) receiving terminal.

“The company is also evaluating other chemicals manufacturing projects in Asia to help meet expected demand growth in the region,” it said, adding it intends to grow its chemicals manufacturing capacity in Asia-Pacific and North America combined by around 40%.

“That growth will be achieved in part by adding 13 new facilities, including two world-class steam crackers in the US that are part of the company’s Growing the Gulf initiative,” it concluded.

By Jonathan Lopez, Additional reporting by Tracy Dang

Source: ICIS News

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