ExxonMobil’s US$5-6b complex sets new marks: PM

Ronnie Lim
The Business Times
Saturday, Jan 11, 2014

 

ExxonMobil Singapore Chemical Plant manufacturing director Georges Grosliere (left) giving a rundown on ExxonMobil’s latest expansion on Jurong Island to Prime Minister Lee Hsien Loong when he toured the facility on 8 January 2014.

ExxonMobil’s (EM) new, second petrochemical complex here – costing an estimated US$5 billion-US$6 billion – is the US energy giant’s largest investment here and also Singapore’s largest manufacturing investment ever, said Prime Minister Lee Hsien Loong who opened the expansion yesterday, bringing EM’s total investment here to well over US$10 billion.

“But that’s not the end of the story,” EM Chemical’s president, Steve Pryor, assured, disclosing that the group was already planning additional specialty plant investments here, including for butyl rubber used for tyres, and premium resins for adhesives. “ExxonMobil views the Singapore complex as a platform for future growth,” he added.

In fact, EM’s top brass, led by group chairman and CEO Rex Tillerson, earlier met the Economic Development Board on Tuesday for discussions including on its future projects here, and followed this up yesterday with another meeting with PM Lee at its Jurong Island facility, prior to the inauguration proper.

EM’s second petrochemical complex here – comprising one million tonnes per annum ethylene cracker, six downstream plants plus a dedicated 220-MW cogeneration unit – saw project ground-breaking in 2007, with construction completed only in end-2012, with the complex fully operational since last May.

The US group’s plan to further grow its integrated refining / petrochemicals facility here – already the group’s largest manufacturing site worldwide – is premised on Asia and the Asia-Pacific driving global economic growth between now and 2040. “We expect global chemical demand to grow at a faster pace than GDP… and two-thirds of the growth in chemical demand will be here in the Asia-Pacific,” said Mr Tillerson.

In that respect, “the Singapore chemical plant is uniquely positioned to serve these growth markets – from China to the Indian subcontinent and beyond”, he added.

This is especially as its integrated Singapore complex – comprising a 605,000 barrels refinery and two petrochemical complexes with total cracking capacity of 1.9 million tonnes per annum – now accounts for about 25 per cent of the group’s global chemicals capacity. Mr Pryor explained that when EM built its first petrochemical complex here back in 2001 “it marked a strategic shift in our manufacturing footprint to Asia”, adding that “it also reflected our belief that Singapore would be the optimal base for serving the market in Asia”.

While EM also has a 25 per cent stake in a similar, but much smaller, joint-venture complex in China, its output only serves the local market. On the other hand, the Singapore facility is 100 per cent owned and operated, which gives it maximum flexibility and makes it an ideal site to develop and commercialise breakthrough technologies, Mr Pryor told ICIS Chemical Business.

As such, EM’s plan to invest in more plants here to produce halobutyl rubber and tackifying resins “can provide a support for earnings even where there is a downturn in the commodity business”, he said in the ICIS handout.

Apart from being its largest manufacturing project, its new Singapore petrochemical complex is also its most technologically advanced, and incorporates over 40 new proprietary technologies, added Mr Pryor. Its cracker is the first in the world to be able to use crude oil as a feedstock, thus lowering feedstock costs. This also saves energy and reduces emissions by eliminating the refining steps needed to produce naphtha feedstock.

And, just as it had relocated a part of the original Jurong Island Highway to make way for the new EM expansion, PM Lee assured yesterday continued government support for Singapore’s energy and chemicals industry, which he said is “one with a bright future”. This is despite looming challenges like global competition from rival hubs in the US, China and Europe, increasing global concern over carbon emissions, and domestic constraints of foreign labour and land here.

Singapore, he said, will continue to upgrade Jurong Island, like for example, building an LPG terminal to import another alternative feedstock for the petrochemical crackers here. Vopak just last month announced it will spearhead this project, with EM signed on as its first anchor tenant.

Support will also come from the Republic upgrading the “software” here, like growing a skilled workforce, and also working closely with the industry to be more environment-friendly, he added.

– See more at: http://business.asiaone.com/news/exxonmobils-us5-6b-complex-sets-new-marks-pm

Also on this story:

Exxon Mobil launches Singapore petrochemical processing

SINGAPORE, Jan. 8 (UPI) — Exxon Mobil has inaugurated a petrochemical processing facility in Singapore on the island of Jurong.

The facility is part of the expansion of an existing chemical plant that was built in 2002 and currently accounts for about a quarter of Exxon Mobil’s global chemical capacity.

Exxon Mobil Chairman and Chief Executive Officer Rex W. Tillerson, speaking at the plant inauguration Wednesday, said global chemical demand would grow faster than gross domestic product expansion as living standards continue to rise and people purchase more household and packaged goods manufactured with chemical products.

“Two-thirds of that growth in chemical demand will be here in the Asia-Pacific region,” Tillerson said. “Exxon Mobil’s expanded Singapore chemical plant is uniquely positioned to serve these growth markets — from China to the Indian subcontinent and beyond.”

Exxon Mobil says the facility incorporates more than 40 new proprietary technologies and is designed to be one of the company’s most energy efficient sites.

A report in the Financial Times Wednesday noted the plant will be able to take certain kinds of crude oil as feedstock for the cracking process without the need for prior refining.

Typically, petrochemicals are produced in Asia from refined oil products such as naphtha at facilities known as steam crackers.

“Converting crude directly into chemicals has several advantages over processing naphtha, the standard feedstock in Asia. It lowers feedstock costs, and it saves energy and reduces emissions by eliminating the refining steps needed to produce naphtha,” Stephen Pryor, president of Exxon Mobil Chemical, was quoted as saying by the Times.

The Asian city-state’s strategic location between the Indian and Pacific Oceans has helped it become one of Asia’s major petrochemical and refining hubs. Singapore supplies a third of Southeast Asia’s fuel.

Although it is known for its refining, storage and distribution infrastructure, Singapore has no domestic oil reserves and must import all its crude oil.

Singapore Prime Minister Lee Hsien Loong, also speaking at the Exxon Mobil plant inauguration, said the government is committed to helping energy and petrochemical companies succeed in the city-state.

“The Singapore government stands fully behind them and will continue to help them to succeed,” Channel News Asia quoted Lee as saying. “These companies, including Exxon Mobil, depend on us to maintain a predictable environment for their investments to succeed over the long term.”

Leo Yip, chairman of the Singapore Economic Development Board, noting Exxon Mobil’s plant expansion represents “the largest manufacturing investment in Singapore’s history,” said it was “testament to our ability to successfully attract and execute complex mega-projects.”

Read more: http://www.upi.com/Business_News/Energy-Resources/2014/01/08/Exxon-Mobil-launches-Singapore-petrochemical-processing/UPI-39551389202485/#ixzz2ranHiOUt

 

INTERVIEW-Exxon starts world’s 1st crude-cracking petrochemical unit

Wed Jan 8, 2014 3:30am GMT

Exxon uses crude instead of naphtha to make petrochemicals

* Petrochemical demand to improve but excess supply persists

By Florence Tan and Seng Li Peng

SINGAPORE, Jan 8 (Reuters) – ExxonMobil officially launched the world’s first chemical unit that processes crude oil in Singapore, aiming to lower costs to better compete with rivals in a market saddled with excess capacity.

Chemical companies typically process refined oil products such as naphtha – created by separating crude oil into lighter groups – at facilites called crackers to create petrochemicals like ethylene and propylene. These are further processed into products such as plastics, soaps or synthetic fibres.

But Exxon’s new cracker in Singapore allows the company to bypass the refining process by processing crude directly into petrochemicals.

“This is the right place to do crude cracking because it gives us an advantage over the predominant feedstock in the region,” ExxonMobil Chemical’s president Stephen Pryor told Reuters.

“The cracker we’ve built is by far the most feed flexible cracker we’ve ever built. It can crack anything from light gases to heavy liquids, including crude oil.”

The new technology helps reduce raw material costs, energy consumption and carbon emissions, Pryor said, while the cracker also produces fuel components.

He declined to detail the extent of Exxon’s savings or specify which crude grades are processed at the cracker. The cost of Brent crude is more than $160 a tonne lower than Asia’s naphtha NAF-1H-TYO, Reuters data showed.

Crackers in Asia typically use naphtha as a feedstock, while those in the Middle East enjoy a cost advantage as they process cheaper ethane and propane gases into petrochemicals.

The multi-billion dollar complex on Singapore’s Jurong Island includes the 1 million tonne per year (tpy) steam cracker as well as production of at least 1.4 million tpy of polymers and elastomers. The cracker was brought online in the middle of last year, but Exxon has not previously confirmed the use of crude as a feedstock.

The project had been delayed for two years due to its complexity and a weak economic outlook which has pared the use of petrochemicals in automobile parts, electrical applicances and consumables, despite excess capacity.

 

CHEMICAL DEMAND RISING

An improved economic outlook in the United States and better demand in China is expected to raise global chemical demand growth in coming years, according to the American Chemistry Council.

The Council sees headline global petrochemicals growth of 4.1 percent in 2014 and 4.5 percent in 2015, up from 2.1 percent last year, said Thomas Kevin Swift, its chief economist and managing director.

“After a couple of very slow years, we saw good demand growth in China last year,” said Pryor. “With China’s export sector picking up, we would expect that to continue.”

Global chemical demand for primary petrochemicals was expected to grow by about 50 percent over the next decade, with China accounting for half of the growth, he added.

To meet this demand, Exxon also planned to raise ethylene capacity at its joint venture with Saudi Aramco and Sinopec in southern China Fujian by 200,000 tonnes per year in 2015. At the Singapore plant, Exxon could also produce specialty petrochemicals such as butyl rubber for tyres and premium resins for adhesives, Pryor said.

Yet, supply from the United States could jump as petrochemical producers, including Exxon, launch projects to take advantage of cheap ethane gas from the shale resources boom. Exxon plans to build a 1.5 million tpy ethylene complex at Baytown, Texas by 2016.

“Demand will grow but it will be a competitive marketplace from a standpoint of capacity and that means that marginal liquid crackers are going to be under a lot of pressure,” Pryor said.

“You already see that in Europe, you see that in Japan and you’re going to see it throughout the region.”

French oil major Total and Ineos have said they will shut loss-making petrochemical plants in France and Scotland as Europe readies for a competitive assault from U.S. rivals armed with cheap feedstock. (Reporting by Florence Tan and Seng Li Peng; Editing by Richard Pullin)

http://uk.reuters.com/article/2014/01/08/exxon-singapore-petrochemical-idUKL3N0KH2VU20140108

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About artidj

I started working as a field engineer in Oil & Gas industry back in 1996. I do this news clipping of the industry and the geography I am interested in, mainly for my own information. I'm glad you find it useful.
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