ExxonMobil (EM), which is eyeing further Singapore plant investments to produce halobutyl rubber used to make tyres and inner tubes and premium resins for adhesives, is fairly "well-advanced" in terms of technical and economic studies for these projects, its chairman and CEO Rex Tillerson disclosed yesterday.
"Discussions with the Singapore government are ongoing, but there is no final investment decision (FID) yet," he said in an interview, though he declined to indicate a timeline for when FID can be expected.
He was elaborating on EM Chemical president Steve Pryor's remarks at the opening of its second petrochemical complex here on Wednesday, that the group was already planning the additional speciality plant investments here.
Mr Tillerson said that "again with the Singapore (petrochemicals) expansion, we have such an important platform with the commodity chemicals capacity we built here, to identify the next best, high-value products we can manufacture reliably".
Halobutyl is important for tyres and inner liners and EM has a technological lead in this, he added.
"As we look at growth in this region, we expect 500 million vehicles in the next 30 years, so clearly there will be a need for a lot of tyres. Our demand projections show there will be requirements."
"This is similar to the resins investment . . . where we have a similar view of how to add value to the molecules we are producing at the Singapore complex," he added.
Rivals such as Germany's Lanxess and other Japanese makers, have built similar buytl rubber plants on Jurong Island, but are currently experiencing a demand downturn because of a slowdown in the automotive industry.
Asked if this was a factor affecting the timing of its planned investment here, Mr Tillerson said that "the current butyl downturn reflects the general downturn. But this is stabilising and we expect economic growth to get back on track. China took a bit of a pause in the last year or two, but I'd expect they will get back on the growth pattern".
He said that as EM's record of calling the top and bottom of cycles was not especially strong, "we look instead at the world from the perspective of the next 25-30 years".
Apart from such value-add investments, Mr Tillerson said that the Economic Development Board was keen on investments to lower costs such as energy efficiency projects, "because energy cost is the gorilla in the room in Singapore . . . it's both a big opportunity and also a big challenge."
EM, for instance, built a new 220MW cogeneration plant as part of its second petrochemical complex, boosting its total in-house generation capacity at its Singapore site to 360MW of power and 1,650 tonnes per hour of steam. The new cracker's ability to use crude oil as a feedstock also saves energy and emissions in eliminating the refining steps needed to produce naphtha feedstock.
Recently-started LNG imports have also helped Singapore to diversify its energy supplies, with natural gas also providing environmental benefits, Mr Tillerson said. As an LNG producer itself, the US group "is keen to be part of the conversation" as Singapore tries to put up a commercial structure around the expansion of the Singapore LNG terminal, he added.
Apart from large holdings in countries such as Qatar and Indonesia, EM has two other upcoming LNG properties, including in Papua New Guinea and a stake in Australia's Gorgon. "So we have two new significant additions to our LNG portfolio, and while much of that has been committed to long-term contracts, we also keep a bit of capacity available for other opportunities, including spot deals," he added.
"Down the road, we also have LNG export permits for the Gulf of Mexico and the west coast of Canada . . . so EM has a steady outlook in terms of continuing to grow our participation in what we think will be a global LNG market."