Engineering News

Exxon Mobil eyes new Singapore petchem plant
Mon Apr 25, 2005 06:33 AM ET

SINGAPORE, April 25 (Reuters) - Exxon Mobil Corp. is conducting a study for a second ethylene plant in Singapore to enhance its position in the global chemicals sector in a race to capture China's surging demand, the company said on Monday.

The new world-scale facility would be fully integrated with the global oil giant's 605,000-barrel-per-day (bpd) refinery in Singapore and would include derivative units, it said.

"A new facility would enhance our position as a global supplier of chemicals," an Exxon Mobil spokeswoman told Reuters.

The company declined to comment on the size of the plant or investment costs.

Analysts say world-scale plants produce roughly 800,000 -900,000 tonnes of ethylene a year, which could mean that the oil major wants to build a plant on the same scale as its existing facility in Singapore.

Exxon Mobil had already said it would expand capacity at its existing Singapore plant to about 900,000 tpy by the end of 2006.

The world's most valuable public company ranked by stock market capitalisation operates an 800,000-tonne-per-year (tpy) ethylene plant in the city-state which was brought onstream in 2001. The Singapore plant represents Exxon Mobil Chemical's single-largest investment in the world.

"Exxon Mobil has a lot of existing infrastructure in Singapore, so it suits them well to build another cracker here," said Victor Shum, an analyst in Singapore with Purvin and Gertz.

Ethylene and propylene, processed from naphtha or natural gas at steam crackers, are the basic building blocks for the chemicals sector, which are used to make a range of products such as plastics, rubber and fibre.

BUILDING BOOM

Ethylene producers across Asia are racing to ramp up capacity to capture a global surge in demand for petrochemical products, especially from China.

Taiwan's Formosa Petrochemical Corp. will bring onstream a new 1.2 million tpy plant at the end of 2006, while Chinese Petroleum Corp. [CHIP.UL] has plans to build a similar plant by 2010.

China alone has plans to nearly double ethylene production to 11 million tpy over the next five years.

In Singapore, Royal/Dutch Shell Group is considering plans to build a cracker, with a targeted start-up date in 2009. Shell's cracker would also be fully integrated with its Singapore refinery.

The new unit would have a capacity of 600,000-900,000 tpy and is expected to cost around $1 billion.

In contrast, Shell and China's CNOOC Group are expected to start up an 800,000-tpy project in southern Guangdong at the end of this year costing around $4 billion due to a lack of infrastructure.

Singapore's other naphtha cracker operator, Petrochemical Corp. of Singapore (Pte) Ltd., a 50/50 joint-venture between Shell and a Japanese consortium led by Sumitomo, runs two facilities with a combined capacity of more than 1 million tpy.

PCS plans to boost propylene capacity by as much as 10 percent to 370,000-tpy and is drumming up plans to build a new 200,000-tpy propylene unit by 2006.

Source: Reuters

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