US to 'remain lowest-cost chemicals producer'

Houston, Texas – ExxonMobil sees North America's chemical feedstock and energy costs remaining among the lowest in the world, Matt Aguiar, senior vice president at ExxonMobil Chemical Co.

“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 in a speech at the recent IHS World Petrochemical Conference..

As well as being the world's largest industrial energy user, the petrochemical industry is unique in the way its uses energy for both fuel and feedstock.

“Today, the production of chemicals accounts for about 15 percent 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.

US output of ethane, propane and other natural gas liquids has risen by more than 65 percent since 2008 – a development it looks set to build on.

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

Rising production of natural gas liquids, or 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 percent of global demand. Ethane and other NGLs are second, at about 30 percent.

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

These trends are driving investments such as ExxonMobil's project at Baytown, Texas, which has been underway for 10 months. When this expansion is completed in 2017, ExxonMobil will have added 1.5 million tonnes per year of steam-cracker capacity.