EXXONMOBIL Corp of the United States plans to increase petrochemical capacity in Asia and the Middle East by more than 50 percent by 2012 to tap into the huge demand.
The company also expects that Asia could account for half of the world's demand for key petrochemicals by 2015, with China alone representing 25 percent, Jim Harris, senior vice president for ExxonMobil Chemical, told reporters at the China Petrochemical Focus conference yesterday.
Harris said that, over the next decade, 60 percent of the world's petrochemicals growth will occur in Asia and more than one-third in China.
To capture the growth, the company is pursuing projects in China, Saudi Arabia, Qatar and Singapore.
Due to fast economic growth, China could see a supply shortage of ethylene, the most basic petrochemical building block, widened to nine million tons in 2010 and 16 million tons in 2020.
This is despite the fact that China has geared up to boost domestic capacity, according to Liu Jie, deputy chief economist of PetroChina Co's chemicals and marketing division.
"Ethylene is still among those sectors in which China encourages foreign investment," Hu Chunli, director of institute of industrial development under the National Development and Reform Commission, said at the same conference organized by the China Decision Makers Consultancy.
Exxon this year formed a US$5 billion integrated oil refining-petrochemical retailing joint venture with Sinopec Corp and Saudi Aramco, the first of its kind in China, in southeastern Fujian Province. Start-up is expected in early 2009.
Harris said Exxon doesn't have current investment plans in China as the Fujian project, a "huge program," will take a long time to develop and is the priority.
"Our approach to the Chinese market is to grow our capacity where we are already operating," Harris said. "We capture the synergies and efficiencies of existing chemical plants and existing refineries."
Exxon is the largest exporter of petrochemicals to China, according to Harris. The company exported 30 percent of its petrochemical products to Asia in 2006, while it is unclear how much went to China.