ExxonMobil buys naphtha as China petchem complex enters test runs
- ExxonMobil's new plant to boost Asian naphtha demand
- Complex produces high-end petrochemical products in China
- Commercial operations expected in second quarter
- The plant also uses liquefied petroleum gas (LPG) as feedstock
ExxonMobil has purchased several shipments of naphtha for its newly launched petrochemical complex in southern China as the U.S. energy major prepares for the formal start-up of the $10-B plant, industry and trade sources said.
The new plant is likely to buoy demand for the petrochemical feedstock and lift Asian naphtha refining margins in the near-term that are already supported by slower Russian supplies.
The complex, based in Dayawan Petrochemical Industrial Park of Huizhou, Guangdong province, is one of the few mega petrochemical plants in China wholly-owned by a foreign investor that are designed to produce high-end petrochemical products.
The ExxonMobil plant is set to receive a 55,000-tonnes (t) (489,500-bbl) naphtha cargo from Qatar's Ras Laffan refinery this week, the third shipment of the petrochemical feedstock into the complex since the plant was built last December, according to two trading sources and LSEG shipping data.
While the U.S. oil major sought second-half March naphtha deliveries earlier via a spot tender, it was unclear if a purchase had been made, said two sources who received the tender document.
The complex began test operations last month and by early February had produced the first on-spec pellets of linear low-density polyethylene (LLDPE), an intermediary for making high-performance plastics, the company said earlier this month on its official WeChat account.
The complex, ExxonMobil's largest investment in China, consists of a 1.6-MMtpy flexible feedstock steam cracker making ethylene, a key building block for plastics and fibers used in a wide range of products like cars, packaging, sports gear and pharmaceuticals.
The cracker is designed to process a mix of naphtha and LPG.
Other key units at the Huizhou complex include two LLDPE units with a combined annual capacity of 1.2 MMtpy, a 500,000-tpy single-train, low-density polyethylene unit and two high-performance polypropylene facilities with a combined annual production capacity of 950,000 tpy.
Four industry and trade sources familiar with the plant's operations said the plant may enter commercial operation in the second quarter.
A China-based ExxonMobil representative declined to comment on the timeline of the commercial launch of the complex and its feedstock procurement.
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