ExxonMobil Buys Multiple Batches of Naphtha to Prepare for Start-Up of Its Huizhou Integrated Petrochemical Facility in China

U.S. energy giant ExxonMobil has bought several batches of naphtha for its newly completed petrochemical complex in southern China as it prepares for the official start-up of the $10 billion plant, according to industry and trade sources.

The new plant is likely to boost demand for petrochemical feedstocks and improve naphtha refining margins in Asia in the short term.

The integrated petrochemical project, located in Daya Bay Petrochemical Industrial Park in Huizhou, Guangdong Province, is one of the few large petrochemical plants in China built by wholly foreign-owned companies to produce high-end petrochemical products.

The ExxonMobil plant will receive 55,000 metric tons (489,500 barrels) of naphtha from Qatar's Ras Laffan refinery, the third batch of petrochemical feedstock to the complex since the plant was completed in December last year, data showed.

Although the U.S. oil giant had earlier sought naphtha delivery in late March through a spot tender, it was unclear whether the purchase had been completed, the sources said.

The company said on its official WeChat account earlier this month that the complex had started trial operation a month ago and produced the first batch of linear low-density polyethylene (LLDPE) pellets that met specifications in early February. LLDPE is an intermediate used to make high-performance plastics.

The complex, ExxonMobil's largest investment in China, includes a 1.6 million tonne/year flexible feedstock steam cracker to produce ethylene, a key feedstock for the production of plastics and fibers, which are widely used in products such as automobiles, packaging, sports equipment and pharmaceuticals.

Other major units in the Huizhou Chemical Park include two LLDPE units with a total capacity of 1.2 million tonnes/year, a 500,000 tonne/year single-train low-density polyethylene unit and two high-performance polypropylene units with a total annual capacity of 950,000 tonnes.

The plant is likely to be put into commercial operation in the second quarter. An ExxonMobil representative in China declined to comment on the commercial start-up and feedstock procurement timeline for the complex.