Exxon eyes new chemical projects to supply China
Tue May 17, 2005 07:10 PM ET
NEW YORK, May 17 (Reuters) - Exxon Mobil Corp., the world's largest publicly traded oil company, on Tuesday said it is considering adding a petrochemical plant in Singapore and building a new one in Qatar to tap into the booming Chinese demand for chemicals.
The company said it is close to completing a study to add a second steamcracking train -- a unit of a petrochemical plant that turns naphtha and light hydrocarbons into ethylene, propylene, and other chemical raw materials -- in Singapore.
Fueled by strong market conditions and rising margins, Exxon's chemicals operations are playing a growing role within its overall business. Profit at its chemicals division more than doubled to a record $1.28 billion in its most recently completed quarter.
"Near term margins will be a fallout of market forces," Exxon Chemical Co. President Mike Dolan said on a conference call. "We're cautiously optimistic about the near term but our focus remains on the long term."
Singapore is strategically located to supply fast-growing markets in Asia, particularly China, which is expected to become the second largest chemical market behind the United States this year. China is already the world's No. 1 importer of petrochemicals as it scrambles to meet a surging demand for plastics, synthetic rubber and fibres as its economy expands.
By 2015, Asia is expected to account for about 45 percent of global demand for key commodity products and China alone is expected to represent 25 percent, Exxon predicted.
The new steamcracking train would be built off an existing plant and is expected to start operations in 2010, Dolan said.
In Qatar, Exxon is planning a steamcracker through a joint venture with Qatar Petroleum that would provide another platform for supplying the Chinese market, as well as Europe, the Middle East and Africa.
The two sides reaffirmed their intention to sign a heads of agreement later this year, ahead of plans to start operations in 2011, Dolan said.
Exxon, along with Venezuela's state-owned Pequiven, is also studying a steamcracking complex in the Latin American country. The study is expected to be completed this year.
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