US to remain competitive in chemical production, says ExxonMobil VP

Posted on 26 Mar 2015 by Tim Brown
ExxonMobil says US chemical industry export capacity will increase. The company is developing a new site in Baytown, Texas, where about 4,000 workers have been on site for 10 months.
ExxonMobil is developing a new site in Baytown, Texas, where about 4,000 workers have been on site for 10 months. Image courtesy of ExxonMobil.

The US chemical feedstock and energy costs will remain among the lowest in the world, according to Matt Aguiar, senior vice president at ExxonMobil Chemical Company.

The ExxonMobil senior executive made the comments this week at the IHS World Petrochemical Conference.

“We expect North America to remain competitive with other regions as a chemical producer. And we see continued growth in jobs, growth in production and growth in US chemical exports,” Aguiar said.

Aguiar explained that the petrochemical industry is the world’s largest industrial energy user, and the only one that uses energy for both fuel and feedstock.

Feedstock, refers to an asset critical to the production of other products. For example, crude oil is a feedstock raw material providing finished products in the fuel, plastic, industrial chemical and pharmaceutical industries.

“Today, the production of chemicals accounts for about 15 per cent of global oil demand and 10 percent of natural gas demand – and includes more than 45 percent of the demand for natural gas liquids,” he said.

He pointed out that US output of ethane, propane and other natural gas liquids has risen by more than 65% since 2008.

“American chemical producers will continue to have an abundant long-term supply of ethane and other natural gas liquids for feedstock,” he said.

Natural gas on the rise

Rising production of natural gas liquids (NGLs) is driving a global shift toward NGLs as a chemical feedstock, Aguiar said.

“Naphtha remains the number one steam-cracker feedstock, accounting for more than 50 per cent of global demand. Ethane and other NGLs are second, at about 30 per cent.”

Naphtha refers to any of various volatile, highly flammable liquid hydrocarbon mixtures used chiefly as solvents and diluents and as raw materials for conversion to gasoline.

“However, ExxonMobil sees demand for NGL feedstock rising by about 125 per cent through 2040, compared to 70 per cent for naphtha. As a result, we expect NGLs to surpass naphtha as the top feedstock in the chemical sector by around 2025.”

The American Chemistry Council projects that US exports of plastics and other chemical products will double from 2014 to 2030, Aguiar pointed out. “Export capacity will increase as planned US chemical expansions move forward, including ExxonMobil’s project at Baytown, Texas,” he said.

Construction at ExxonMobil’s project has been underway for 10 months, Aguiar said. “During this time, we have had about 4,000 workers on site representing a range of disciplines, including carpenters, electricians, welders, and ironworkers,” he said. “Foundation and underground work will be completed over the next few months, followed by installation of steel structures and equipment, and then piping, electrical and instrumentation.”

When the Baytown expansion is completed in 2017, ExxonMobil will have added 1.5 million tons per year of steam-cracker capacity. The ethylene feedstock will be used for downstream chemical processing, including processing at two new 650,000-tons-per-year high-performance polyethylene lines at the company’s Mont Belvieu plastics plant.

The expansion is creating a total of 10,000 construction jobs and is projected to add 4,000 new, permanent local jobs, including 350 positions at the ExxonMobil plants.