ExxonMobil Plans Petchem Plant and LNG Investment in China
ExxonMobil announced that it recently signed a preliminary deal to build a petrochemical complex and invest in a liquefied natural gas terminal in China. The deal with the southern Guangdong provincial, which is worth billions of dollars, includes a 1.2 million-tonne-per-year ethylene plant, two polyethylene production lines, and two polypropylene lines in the city of Huizhou.
The company has also agreed to take part in a provincial project of building a liquefied natural gas terminal in the coastal Huizhou and to also supply the liquefied natural gas for the terminal. China is granting greater access to its massive chemical markets for both global majors and local independents. Exxon would be one of just a few international oil majors to invest in the liquefied natural gas in China.
Exxon’s agreement follows the German chemical giant BASF’s $10 billion investment to build the first wholly foreign-owned chemicals complex in China. BASF’s complex will also be built in Guangdong and will produce 1 million tonnes a year of ethylene through a steam cracker.
Exxon’s deal with China could be seen as a goodwill gesture by the country during a heightening trade war between the US and China.
The local government of Guangdong province and Huizhou, along with Guangdong Yuedian Group, the state power company signed the preliminary deal.
After a joint study signed late last year, the petrochemical deal did not come as a surprise, but the liquefied national gas was not expected and it marks the second investment in China’s gas infrastructure by an international oil company.
Saul Kavonic, director for Asia Pacific markets and head of energy research at Credit Suisse in Australia stated, “It marks a salient step for Exxon in their pursuit of becoming an LNG portfolio player.”
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