ExxonMobil China cracker project to add 2.5m tonnes/year of PE, PP capacity – CFO

Joseph Chang

06-Dec-2023

NEW YORK (ICIS)–ExxonMobil’s China cracker project will include 2.5m tonnes/year of combined polyethylene (PE) and polypropylene (PP) capacity downstream, its chief financial officer (CFO) said.

“When completed, the complex will have three PE and two PP lines for a combined performance product capacity of over 2.5m tonnes/year. This capacity will more efficiently serve China’s domestic demand, which is currently being met with imports,” said Kathy Mikells, CFO of ExxonMobil, at the company’s investor day.

The breakdown will be 1.65m tonnes/year of PE and 850,000 tonnes/year of PP with the first full year of operations in 2026. The cracker, being built in Huizhou in Guangdong province, is targeted for start-up in 2025.

Construction costs are also expected to be substantially lower than building a similar project on the US Gulf Coast.

“By building it in China, we are seeing a construction cost advantage of about 50% versus the US Gulf Coast, and our project team is helping set new Chinese construction records,” said Mikells.

“The China petrochemical complex is a significant step in growing our global manufacturing footprint and will be the first 100% foreign-owned petrochemical complex built in China,” she added.

The differentiated performance aspect of the downstream PE and PP in the China project should drive an attractive return on investment, said Karen McKee, president of ExxonMobil Product Solutions, in an earlier interview with ICIS.

“Whatever we invest in, we’re always looking for an advantaged project with an advantaged return. For our chemical business, we have the advantage of our performance products… that have attributes that customers are somewhat willing to pay more for, typically because they can use less plastic to deliver the same utility,” said McKee.

“And so inherently, we have some advantages that we’ve built into this project. The other thing we’ve brought to bear is this great skill we have at ExxonMobil on project building. We are able to be very cost effective,” she added.

Focus article by Joseph Chang

Thumbnail shows ExxonMobil’s China cracker project under construction

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