Oil giant ExxonMobil (NYSE: XOM) has announced a multi-billion dollar upgrade of its Singapore integrated manufacturing complex to convert more fuel oil and other “bottom-of-the-barrel” crude products into higher value lube base stocks and distillates. The upgrade will also increase the capacity of the facility to produce an extra 48,000 barrels per day (b/d) of low-sulfur fuels to meet the International Maritime Organization’s 0.5 percent sulfur regulation (IMO 2020), which goes into effect on January 1, 2020.
Construction will begin in the latter half of this year and start-up operations are forecast for 2023.
Commenting on the reason for the upgrade, Bryan Milton, president of ExxonMobil Fuels & Lubricants Company, said, “the demand for high-quality fuels and lubricants will increase as the global economy expands. By using a combination of proprietary catalyst and process technologies, we will increase the site’s competitiveness and help meet growing demand for high-performance lubricants and cleaner fuels.”
The upgrades will add 20,000 b/d of ExxonMobil Group II base stocks, which are used to create automotive and engine oil lubricants. The company adds that the base stocks can also be used in other industrial applications.
FreightWaves contacted marine fuel industry executives in Singapore for comment and found that the local industry welcomes the investment by ExxonMobil.
“It’s very good,” said one maritime fuel executive. “There’s high demand for fuels and lubricants in the Asia-Pacific region. ExxonMobil has its largest facility in the world in Singapore and it will be able to utilize all different kinds of feedstocks. If shipowners don’t use low-sulfur fuel, then they will have to use blending with distillates and that’s very expensive. You can see the value in producing fuel rather than blending stocks,” the executive said.
A Singapore-based bunker trader also welcomed the news. “As a bunker trader, I’m always excited to hear that the oil majors are looking to expand as we’re always looking for extra stock/cargoes to trade for ourselves. With them [ExxonMobil] being an oil major then they’ll have great relationships with ship owners. If they are able to produce it then I’m sure that they will be able to sell it,” the bunker trader said.
ExxonMobil’s crude oil refinery is integrated with a series of chemical plants. The first portion of ExxonMobil’s complex was built in Singapore in 2001. Additional plants have been built or bought by the company over time.The facility produces 592,00 b/d of a wide range of products such as liquefied petroleum gases, motor gasoline, naphtha, gas oil and others.
It additionally produces lubricants, asphalt and aromatics such as paraxylene and benzene. ExxonMobile also opened a diesel hydrotreater in 2014 to produce ultra-low sulfur diesel, which increased the facility’s low-sulfur diesel capacity to 25 million litres a day (of which more than 10 million litres can meet the IMO 2020 specifications). The facility currently has more than 3,500 employees.
ExxonMobil reported US$20.84 billion in earnings after taxes in 2018. The company produced 2,266 thousand barrels of liquids per day; 9,405 million cubic feet of natural gas for sale per day; 5,512 thousand barrels per day of petroleum product sales. It handled about 2.5 billion barrels of crude in 2018 across all of its businesses.