U.S. supermajor ExxonMobil plans to permanently shut down one of two steam crackers at its huge Singaporean refining and petrochemical complex, Reuters reported on Thursday, citing anonymous sources with knowledge of the plans.
Exxon owns and operates a 592,000-barrel-per-day (bpd) refinery in Jurong, which is fully integrated with the Singapore Chemical Plant (SCP). The petrochemical complex was first commissioned in 2001 and was further expanded to more than double its capacity in 2013. The chemical plant has an ethylene production capacity of 1.9 million tonnes per year, Exxon says.
However, the reported closure of the older of two steam crackers would be in line with a global reshuffling of capacity as excess petrochemicals capacities have threatened profitability in recent years.
The petrochemicals industry has been grappling with razor-thin margins and losses for months, due to the global overcapacity mostly coming from the huge overbuild in China.
The petrochemical overcapacity in China has affected Asian markets and South Korea has also urged its struggling petrochemicals sector to slash excess capacity and restructure operations amid a global glut that has depressed petrochemicals margins and threatened the industry in many Asian and European countries.
Amid the persistent global glut, the South Korean government in August said that the 10 largest domestic companies have agreed to restructuring, including by slashing their naphtha-cracking capacity by up to 25%.
Naphtha is processed in steam crackers to produce ethylene, propylene, and other monomers used in the production of various plastics and synthetic products.
An ExxonMobil spokesperson told Reuters the company doesn’t comment “on market rumors or speculation” regarding the reported plans for a permanent closure of one steam cracker, expected to be completed by June 2026.
Exxon plans to reduce the number of employees by 10-15% by 2027 as part of global restructuring.
In October, the U.S. supermajor agreed to sell its Esso-branded retail fuel station network in Singapore to Indonesia’s Chandra Asri Group.
By Tsvetana Paraskova for Oilprice.com
