Market outlook: Feedstock flexibility key from ExxonMobil in Singapore

ExxonMobil is using innovative technology in Singapore to enable it to crack crude oil and other streams

ExxonMobil says as many as 50 refinery streams move backwards and forwards between its expanded cracker and refinery in Singapore. The company has pushed the envelope on steam cracking still further to crack crude oil and eliminate the reliance on expansive naphtha or other costly liquid feedstocks.

ExxonMobil’s advances open new Asian markets Copyright: Exxon Mobil

More than 40 new proprietary technologies are being employed in the company’s Singapore petrochemical complex at the heart of which is a new 1m tonne/year steam cracker started up last year. The production complex expansion was inaugurated on Wednesday 8 January by Singapore Prime Minister Lee Hsien Loong.

ExxonMobil built the world’s first steam cracker in the US in the 1940s and has been developing its own steam cracking technology since.

The current head of the energy giant’s chemicals business, Stephen Pryor, says the new Singapore cracker can process an unprecedented range of feedstocks, from light gases to heavy liquids.

“In fact, it is the first steam cracker that can use crude oil as a feedstock,” he said. “It is ExxonMobil’s biggest advance in steam cracking since we invented the process some 70 years ago.”

That degree of flexibility, and the product streams that will be available from the plant, are helping the company target a wider range of growing markets in East Asia. “ExxonMobil views the Singapore complex as a platform for future growth,” according to Pryor.

ADDITIONAL DERIVATIVES
Alongside products it has made historically, the company has looked at what additional derivatives it might want to produce. There are plans to make halobutyl rubber from the C4 streams from the cracker and tackifying resins from C5s.

The complex includes a 300,000 tonne/year specialty elastomers plant and Singapore will become ExxonMobil’s global supply point for these products.

The company believes ethylene is heading for oversupply in Asia and has voiced concerns about lengthening derivatives markets, particularly as new capacities come on-stream in the US based on shale gas and in China based on coal.

“Asia remains at the bottom of the cycle. We’ll be in a challenging environment for a while and the extent to which the shale phenomenon [in the US] will add to that challenge – that’s a fact of life too,” Pryor said.

Its push into specialties and the broadened cracker feedstock capability would be hedges against a more challenging period for the industry.

UPBEAT ABOUT THE LONG TERM
ExxonMobil is convinced, however, that the long-term fundamentals for the chemicals business remain strong. Regional demand for its metallocene polyethylenes (PE), for instance, is expected to grow 1.5 to 2.0 points higher than GDP.

Global chemicals demand is expected to grow by 50% over the next decade with two thirds of that growth in Asia-Pacific.

The innovations that have been the driving force behind the capacity expansions in Singapore show what can and has to be achieved by petrochemical producers if they want to remain competitive.

The shale revolution in the US has been a huge driving force for change in the sector, prompting a wave of capacity expansions and new project announcements.

But Pryor has talked before about the game-changing nature of shale and put the rush to add new shale-gas based petrochemicals capacity into perspective.

“The idea that the shale feedstock advantage will always be so large overlooks the dynamic nature of energy and chemical markets,” he said at the Gulf petrochemical Association annual meeting in Dubai in November.

“Shale technology has given our industry a tremendous new source of energy and feedstock. But shale is not our industry’s first game-changer and it won’t be the last,” he added.

Major petrochemical companies will always play to their advantages, but those advantages shift position and change over time.

ExxonMobil was not prepared to jump on the shale gas to chemicals bandwagon too soon but has plans to add 1.5m tonnes of ethylene capacity in Baytown coupled to two 650,000 tonne/year PE plants in nearby Mont Belvieu.

The addition of light feedstock cracking capacity in the US, however, is really only layered on the company’s multi-feedstock approach.

“The idea that the shale feedstock advantage will always be so large overlooks the dynamic nature of energy and chemical markets,” Pryor said at the GPCA meeting.

“For chemical companies to maintain a competitive advantage in this ever-changing environment, we must continuously innovate across the value chain – from our raw materials to our finished consumer products.”