After 120 years in Asia-Pacific, ExxonMobil has re-affirmed its commitment to supply the fast-growing market with a huge chemicals expansion in Singapore. The country is an important hub for the business in the region
By John Baker, London
The start-up of the new ethylene steam cracker and downstream polymer and chemical units at ExxonMobil Chemical’s Singapore Chemical Plant marks a milestone in the company’s development.
The single largest investment in its petrochemicals business, it doubles the size of the chemicals complex, making it the largest integrated refining/chemicals facility in ExxonMobil Chemical’s global production network. It now accounts for nearly a quarter of the company’s global chemicals capacity.
Now, says Stephen Pryor, president of ExxonMobil Chemical, “We are making new premium products that we have never made in the [Asian] region before – metallocene polyolefins and new propylene-based metallocene elastomers. It’s a big step... we see [Singapore] as a strategic hub for all of Asia.”
Pryor regards the decision to base the major expansion in Singapore as a natural one. The company has been doing business in the country for 120 years and he regards it as having a number of tremendous advantages. “It has a strong, stable pro-business government that maintains consistent long-term policies. It has a well-established legal system and a highly capable and skilled workforce. On top of this it is strategically located, with good logistics systems and ready access right across Asia – physically it works for us.”
Also, he adds, ExxonMobil Chemical has a strategy of investing in a select number of integrated sites.
The company made its first major chemicals investment in Singapore in 2002 with its first cracker complex. Located on a 200-acre site on Jurong Island, the complex was fully integrated with an existing ExxonMobil refinery and produces 1.5m tonnes/year of basic petrochemicals, used to make products such as polyethylene (PE), polypropylene (PP) and oxo-alcohols.
The decision to double the size of the complex was taken in 2007, and involved construction of a new steam cracker, two PE units, a PP unit, a specialty elastomer plant, an aromatics extraction unit and the expansion of oxo-alcohols production (see a sense of pride).
The expansion, says Pryor, “cements Singapore as the heart of our business in Asia and is a powerful platform for serving our diverse customer base. We view it as a platform for growth and can still use more molecules [coming from the cracker] to develop added-value products in the future.”
While the output will be used mainly to supply customers across Asia, China is the big draw in the region. Indeed, says Pryor, when we made the first investment in Singapore it was a bet on China. “We believed we could serve the market effectively from Singapore.”
The company does have production there, in a joint venture in Fujian province with Sinopec and Saudi Aramco, which is currently expanding to add new downstream derivatives to the integrated refinery/ petrochemicals base. But while production in China has its place in the mix, the output really only serves the local market. In terms of making a major step up in capacity in the region, Singapore brought unmatched advantages, explains Pryor, mainly in terms of feedstock flexibility, scale and manufacturing effectiveness, and the possibility of producing a broad slate of commodity and premium products.
Also, he adds, the venture in Singapore is 100% ExxonMobil owned and operated, which gives it maximum flexibility and makes it an ideal site to develop and commercialise breakthrough technologies.
“In Singapore we have incorporated dozens of new proprietary technologies, many focused on the cracker and the unique feedstock flexibility the cracker has.” A major advance here, explains Pryor, is the ability with the new cracker to use crude oil directly as a feedstock. This, he says, is a first not only at ExxonMobil but in the petrochemicals industry. By skipping the step of refining of the crude into naphtha, direct crude cracking saves energy, increases efficiency and lowers emissions.
“In Singapore we have incorporated dozens of new proprietary technologies, many focused on the cracker and the unique feedstock flexibility the cracker has”Stephen Pryor
Pryor is not revealing, however, the types of crude that can be fed into the cracker, nor the proportion of crude in the overall cracker feed. But he does say that the advance relies on a set of new technologies developed in the company’s US R&D facilities and represents “another step in the industry and a new step in feedstock flexibility.”
This feedstock flexibility is a key focus for ExxonMobil Chemical, stresses Pryor. “Active feedstock management is a core strategy for us. We are constantly looking for different molecules, then using our technology to take the lower cost molecules and produce cracker products. We don’t just wait for them to fall into our lap; we go out and create the technology.”
Pryor also points to other core attributes that ExxonMobil brings to bear to ensure the long-term growth and profitability of its chemicals business. These are based around operational excellence, leading technology and global integration. In Singapore, he says, we will continue to be focused on operational and safety excellence now that the plants are onstream.
The construction phase was achieved, he adds, with a superb safety record. Thousands of workers from across Asia and speaking many languages worked over 80m hours without a single lost-time injury during construction, which stands, says Pryor, as a testament to systems and safety leadership.
“Operational excellence is built into the fabric of how we do business and this is certainly the case in the Singapore expansion. New employees are instantly immersed in our operating system... we use the same orientation everywhere we do business.” Even in the new Shanghai technical centre, adds Pryor, the young staff “have inhaled the philosophy.”
In Singapore, he adds, we go beyond operations and can develop outstanding engineers and professionals, capable of assuming leadership roles in Singapore, Asia and around the world. “Our Asian talent is an important part of our business.”
Given such a sound base to build on, Pryor sees potential for further investment in Singapore to serve the Asia-Pacific region.
“We are always on the look-out for selective advantaged investments, regardless of which area, but in Asia, after the enormous step in Singapore, we are already looking to take co-product molecules as feeds for new products in the region.”
Pryor sees potential here in ExxonMobil’s specialty products, such as halobutyl rubber and tackifying resins. Products like these, produced at integrated sites alongside high-volume commodities, can provide a support for earnings even when there is a downturn in commodity businesses, he notes.
“But the key theme here is never about growth for growth’s sake, or being wedded to a particular geography. We are a global player and we focus on advantaged feedstocks, efficient processes and premium products. If you can invest with all three in place, that’s how you sustain industry leading results and returns.”
ExxonMobil Chemical is also expanding capacities in the US, with a new shale gasbased cracker, and in Saudi Arabia, where it is adding specialty elastomers capability at its Kemya joint venture with SABIC, at the moment, and is also looking at further opportunities in China, says Pryor.
The goal, stresses Pryor, is to create and maintain a sustainable business with a global footprint. This it seeks to achieve on two levels – internally, with continuous improvements to the sustainability of its own operations; and externally through the benefits its products bring to its customers and their customers in turn.
“Each of our plants has an environmental business plan which drives continual improvements in energy efficiency, and emissions and waste reduction. Also, we invest in our plants to reduce environmental impacts, for example by installing co-generation facilities as in the new expansion in Singapore, and we invest to develop new technologies to improve processes and manufacturing. The crude oil cracking in Singapore is a good example here.”
On the product side, adds Pryor, ExxonMobil Chemical looks for constant improvement in what we offer, even with our polyethylene workhorse. Over the years the company has achieved film downgauging of 50%, so that half the polymer can deliver the same outstanding performance in use. This reduces waste and weight and delivers benefits for customers – these are tangible benefits that customers find attractive and are prepared to pay for, he says.
Such progress is essential, says Pryor, if we are to meet the changes of the future. He believes that “together, we can meet the challenges of the future”.