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ExxonMobil sees 'good opportunity' in potential Sabic petchem partnership

  • Author
  • Chris Ferrell
  • Editor
  • Jason Lindquist
  • Commodity
  • Petrochemicals

Houston — An anticipated steady increase in chemical demand through 2040 offers a "really good opportunity" for ExxonMobil as it considers moving forward on a potential project with Sabic, the company said Friday during its second-quarter earnings call.

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The two companies said earlier this week they are considering locations in South Texas and Louisiana for a proposed multibillion-dollar petrochemical complex anchored by a world-scale ethane-fed steam cracker. The project would feature a 1.8 million mt/year ethylene-capacity steam cracker that would feed a monoethylene glycol plant and two polyethylene plants.

Jeff Woodbury, ExxonMobil's vice president for investor relations, said Friday that the company sees demand for chemical growing by about 1% above GDP between now and 2040, and over the next decade demand for ethylene is expected to increase by about 4%/year. Such growth would necessitate the need for an additional 6 million-7 million mt/year of annual capacity, even with the new announcements and projects currently under construction.

"Our outlook will inform our business strategy and our investment choices, and we see this as a really good opportunity," Woodbury said.

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ExxonMobil is currently building a 1.5 million mt/year ethane-fed steam cracker and associated PE plants at its Baytown complex, already the largest in the US by capacity.

The project, scheduled for startup during the second half of 2017, is one of as many as six involving world-scale steam crackers in the USGC scheduled to come online within the next 12-24 months as part of the first wave of projects fueled by abundant natural gas-related feedstocks in North America.

ExxonMobil Chemical's operations in the USGC include olefins and polymers production in Baytown and Beaumont, Texas, as well as Baton Rouge, Louisiana, totaling just under 8.5 million mt/year.

Woodbury said the project with Sabic is being evaluated, and also noted the two companies have a long history of successful partnerships.

ExxonMobil and Sabic have worked together for 35 years in major chemical joint ventures in Saudi Arabia. Their first joint venture was established in 1980 to produce several polyolefins, including ethylene and propylene, and became Saudi Arabia's first polyethylene producer. Additionally, they partnered together in 1985 to establish Yanpet -- one of the largest petrochemical complexes in that country.

Any new facility in the USGC would take several years to complete, but potential time frames would call for the new ethylene and derivatives to come online during the next decade following the first wave of ethane-fed petrochemical expansions, based on market feedback.

--Chris Ferrell,

--Edited by Jason Lindquist,