InterviewExxonMobil eyes Fujian, China chem complex expansion

14 May 2010 17:00  [Source: ICIS news]

(recasts paragraph 18 for clarity)

MUMBAI (ICIS news)--An expansion of the new Fujian petrochemical complex in China is being considered just months after it became operational because of strong demand and a favourable market reception for the complex’s products, an executive of energy giant ExxonMobil said on Friday.

“Our partners at the Fujian site – Sinopec and Saudi Aramco – have agreed to look [at] what might come there, either to debottleneck or expand the new facilities that we just brought on,” ExxonMobil’s senior vice president, Lynne Lachenmyer, told ICIS news in an interview.

“There is a study on what is going to happen next, but there is no decision yet,” she said.

ExxonMobil has a 25% interest in the $4.5bn Fujian Integrated Refining and Ethylene Joint Venture that was started up in November last year.

Fujian Petrochemical Co Ltd, a unit of Sinopec, controls 50% of the project, while Saudi Aramco holds the remaining 25% stake.

The Fujian complex includes a 240,000bbl/day refinery and an 800,000 tonne/year ethylene steam cracker with downstream plants.

Its downstream plants include an 800,000 tonne/year polyethylene unit, a 400,000 tonne/year polypropylene unit and a 700,000 tonne/year paraxylene unit. The complex also has a 250-megawatt cogeneration facility.

“All units are operating at full capacity. They have demonstrated their nameplate capability,” said Lachenmyer.

Products take-up had been very robust and, as long as the growth continues, there is scope for expanding its capacity, she said.

“All the products have been placed with the local provincial area. The receptivity of our products in the market place has been good,” Lachenmyer said.

Meanwhile, ExxonMobil expects to reach “peak work load” at its second petrochemical complex in Singapore, after securing all seven furnaces required to run a 1m tonne/year steam cracker being built at the site, she said.

The Singapore complex, which in on track for a phased start-up throughout 2011, would primarily cater to the Chinese market as well as India and southeast Asia, she said.

Lachenmyer said demand recovery in the petrochemical industry since the second half of 2009 up to the first quarter of this year had been swift, but this should be treated with caution given that the global economy has yet to find solid footing.

“We’re surprised at how swiftly the recovery has come about – which is good – but there’s still a lot of caution in the market,” she said, citing the uncertainty of how GDP would grow once the stimulus packages across countries have been reduced.

Global economic recovery remained in “very much a fragile state”, she said.

A supply glut also looms over the industry, with about 12m tonnes/year of new capacity expected to come on stream this year in the Middle East and China.

“We expect to see more of that volume coming in the second half of this year and certainly the exports coming out of the Middle East will flow either into Europe or to Asia, [while] the rest of the capacity additions are in Asia themselves," Lachenmyer said.

As a result there could be an additional negative impact on the margins of the overall industry, she warned.

For more on ExxonMobil, Sinopec and Saudi Aramco visit ICIS company intelligence 
Please visit the complete ICIS plants and projects database
Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog
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By: Pearl Bantillo
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