Exxon Inaugurates Petrochemical Plant in Singapore

ExxonMobil, the US energy group, is moving to capitalise on growing demand in Asia by inaugurating the world’s first facility that processes crude oil directly into petrochemical products at a facility in Singapore, according to a report by Financial Times on January 8. The facility, part of a plant that accounts for a quarter of Exxon’s global chemical output, is the largest single manufacturing investment in the Asian city-state.

According to company sources, Exxon had invested more than $3.5bn in the facility. Higher living standards in Asia have led to a jump in demand for petrochemicals, used to make polythene and polypropylene, which are components in packaged consumer goods and synthetic fibres that make clothing.

Rex Tillerson, chief executive, said global chemical demand would grow faster than gross domestic product expansion as living standards continued to rise. "Two-thirds of that growth in chemical demand will be here in the Asia-Pacific region,” he said at the inauguration of the facility on Wednesday. Energy and chemicals are the biggest contributor to Singapore’s manufacturing output, with Mitsui, BASF and Shell also operating in the country. Shell’s largest oil refinery is based in Singapore, where it also processes ethylene.

Petrochemicals such as ethylene, used to make plastics, are typically produced in Asia from refined oil products such as naphtha, at facilities known as steam crackers. New technology used at the Exxon facility in Singapore can take certain kinds of crude oil as feedstock for the cracking process without the need for prior refining.  "Converting crude directly into chemicals has several advantages over processing naphtha, the standard feedstock in Asia,” said Stephen Pryor, president of ExxonMobil Chemical. "It lowers feedstock costs, and it saves energy and reduces emissions by eliminating the refining steps needed to produce naphtha.”

This new Exxon facility is part of the expansion of a chemical plant that was built in 2002 on the island of Jurong, site of a cluster of petrochemicals companies. Singapore, which supplies a third of southeast Asia’s fuel, has been trying to attract investment from companies operating downstream in the petrochemicals sector.