Feedstock flexibility crucial amid shale gas boom – ExxonMobil

04 April 2014 03:24 Source:ICIS News

Lynne Lachenmyer, senior vice president, ExxonMobil ChemicalInterview story by Nurluqman Suratman

SINGAPORE (ICIS)--Feedstock flexibility is crucial for producers to maintain a competitive advantage in light of the transformative impact of shale gas on the chemical and energy markets, a senior executive at ExxonMobil Chemical said on Friday.

“Shale is not the first feedstock to shake up our industry and it won't be the last,” Lynne Lachenmyer, senior vice-president of ExxonMobil Chemical, told ICIS.

The US shale revolution, which has led to a petrochemical renaissance in the country, is “just the latest step in the ongoing evolution in the search for advantaged chemical feedstock”, she said.

Chemical producers in the US currently have a major cost advantage over the oil-based petrochemicals makers in Europe and Asia. US manufacturers can produce ethylene for less than half of what it costs in Europe, Asia and Latin America, according to Lachenmyer.

“Building competitive advantage is not only about access to low-cost ethane, which is widely available on the market. Building competitive advantage is about how you manage the feedstock molecules,” Lachenmyer said.

The feedstock landscape is constantly shifting, influenced by trends and innovations in the chemicals industry as well as in the upstream and refining sectors, she added.

Hence, the flexibility to run the most attractive feedstock at any given time “is more important than ever because of the transformative impacts of shale,” Lachenmyer said. “These impacts will continue to unfold as shale production and exports grow.”

ExxonMobil’s new world-scale stream cracker at its Singapore refining and petrochemicals complex, for example, is able to process a wide range of feedstocks, including crude oil, Lachenmyer said.

“Crude [oil] cracking is a first for our company, a first for the world, and yet another step in our industry's ongoing search for advantaged chemical feedstock,” Lachenmyer said.

Converting crude oil directly into chemicals provides a cost advantage over using feedstock naphtha, which is the industry standard in Asia, she said.

Direct conversion from crude oil also saves energy and reduces emissions by eliminating the refining steps needed to produce naphtha, Lachenmyer added.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By Nurluqman Suratman