Exxon Mobil technology could cut $200M from yearly petrochemical costs

PHOTO GALLERY: Click through for a tour of Hunstman’s petrochemical plant in Port Neches as it was expanded last year.

Technologies developed by Exxon Mobil and Saudi Aramco could dramatically change the petrochemical sector by transforming crude oil directly into the primary building block of most plastics, according to a new report.

The new processes could save petrochemical plants $200 million a year through reduced production costs, according to the study released Wednesday from the IHS data and consulting firm.

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Exxon’s process involves turning crude oil directly into the base chemical, ethylene, saving up to $200 per metric ton of ethylene. It bypasses the middle step of refining crude into naphtha, the primary feedstock for most petrochemical plants outside of the U.S. Naphtha is more expensive than crude oil. Most American petrochemical facilities rely on cheap and abundant natural gas as the feedstock to produce chemicals, resins and plastics.

“It is this feedstock spread that contributes most of the cost-savings advantage,” said Anthony Pavone, director of engineering at IHS Chemical and co-author of the report.

Exxon Mobil opened its only crude-to-ethylene plant in 2014 at its Singapore Chemical Plant, which is Exxon’s largest integrated petrochemical complex in the world. The plant produces 1 million tons of ethylene from crude per year. The Exxon process feeds crude oil directly to the cracking furnaces. Cracking is the process that breaks down complex hydrocarbons like oil into simpler molecules.

The Exxon process involves preheating the crude oil and extracting its lighter elements as vapor, which is then broken down to produce the ethylene, according to the report. The heavier elements of the crude are then sold or sent to Exxon refineries.

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The technology developed by state-owned Saudi Aramco is still conceptual and involves a somewhat slightly different process that produces a similar result.

In June, Aramco announced a joint venture with publicly traded but mostly state-owned Saudi Arabia Basic Industries Corp. to study building a crude-to-chemicals complex in Saudi Arabia.

IHS estimates the joint venture also would save about $200 per metric ton. However, the increased up-front costs of building the crude-to-chemicals versus a traditional naphtha process would offset some of those savings.