Exxon Mobil said it will buy a massive petrochemical plant in Singapore from a financially struggling company at a discounted price.
Exxon Mobil is acquiring the aromatics chemical plant, which just opened in 2014 in Singapore’s Jurong Island, from the Jurong Aromatics Corp. The corporation is going through the U.S. equivalent of bankruptcy proceedings. The plant has been shut down for a majority of its existence, only restarting operations in July.
The plant was built for $2.4 billion. Although Exxon Mobil won’t reveal the acquisition price, the Korea Times reported the price at $1.78 billion. Exxon outbid South Korea’s Lotte Chemical and a consortium including Paris-based Total. The facility churns out nearly 1.5 million metric tons of chemicals a year.
The aromatics plant primarily produces paraxylene and benzene and the chemicals are known as aromatics because of their sweeter odor. Paraxylene is a chemical used to make polyesters and plastics, while benzene creates other chemicals, including gasoline additives. Jurong Aromatics cites applications for textiles and clothing, construction, tires, sports equipment and plastics.
Singapore already is home to Exxon Mobil’s largest integrated refining and petrochemical complex.
“Our growth in Singapore is driven by the expected increase in global demand for chemical products over the next decade of nearly 45 percent, or about 4 percent per year, which is a faster pace than energy demand and economic growth,” said Neil Chapman, president of Exxon Mobil Chemical.
He noted that nearly 75 percent of the increasing demand is expected to be in Asia Pacific as a result of its growing middle class.
In that same vein, Exxon Mobil is expanding chemical and plastics production along the Gulf Coast at its existing Baytown and Mont Belvieu facilities east of Houston. Most of the expanded production capacity, which should be online by the end of 2017, is expected to be exported to Asia.
Likewise, Exxon Mobil and Saudi Arabia’s largest chemical company, Sabic, recently picked a site near Corpus Christi to build a $10 billion petrochemical complex.