ExxonMobil's shut CDU may hit base oils feedstock

04 May 2007 05:38  [Source: ICIS news]

SINGAPORE (ICIS news)--Prolonged shutdown of a crude distillation unit (CDU) at ExxonMobil Singapore’s Pulau Ayer Chawan site on Jurong Island would affect feedstock supplies to the company’s baseoils plant, market sources said late on Thursday.

This could eventually lead to lower operating margins at the plant on the same site, they added.

The 115,000 bbl/day CDU, which was shut after a fire broke out on Thursday, will remain so pending further investigation.

The sources said that if the investigations were prolonged, the CDU could remain shut and this would affect feedstock supplies.

“It all depends on how soon the CDU is able to restart. If the investigation extends indefinitely, it will affect the feedstock availability and could lead to lower operating margins at the company’s base oils plant in Pulau Ayer Chawan,” a source at a major blender in the region said.

Most Asian base oils market players agreed that the impact of the shutdown would depend on how long it remained shut.

However, the accident was likely to be a “small and straightforward” one, a market source said.

“The impression I got after talking to people in the plant is that the CDU may be restarted in a few days after investigations into the incident are completed,” he said.

The company was likely to have enough buffer feedstock to offset any production loss because of the shutdown, he added.

The CDU was shut down following an early-morning fire on Thursday that killed two contract workers. The other CDU at the site with a capacity of 185,000 bbl/day was not affected.

The affected CDU provides the feedstock for the Group I base oil plant at the same site.

ExxonMobil produces 1.275m tonnes of base oils in Singapore – 625,000 tonnes of Group 1 and the rest Group II.

Sources in ExxonMobil would not comment on the impact of the shutdown on the company’s base oils output.

By: Shibu Itty Kuttickal
+65 6780 4359

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