SABIC-ExxonMobil joint venture in Portland starts operations

SABIC and ExxonMobil, the two leading petrochemical giants have announced on the 20^th of January, the start of operations at the world’s largest ethane cracker and other downstream manufacturing units from the month of December FY21 near corpus Christi, according to Houston Business Journal.

This JV is going to add 1.8 million metric tonnes per year of Ethylene capacity to the North American production capacity. The facility is also home to two polyethylene manufacturing units each with a capacity of producing 650,000 metric tons of polyethylene per year and a Mono Ethylene Glycol plant (MEG) with a production capacity of 1.1 million metric tonnes per year.

This announcement coming at a time when ExxonMobil plans to shut down its largest refinery in USA in Baytown by late next week, could bring stability to the US C2 olefin derivatives and polyolefins market in the coming weeks. ChemAnalyst’s 20^th January piece on the present supply side issues ailing the US Ethylene market and the possible stabilisation by early to mid-February may indeed come to fruition.

The JV could also help improve the supply side bottlenecks faced by the polyethylene market in the months of February and early March due to deep freeze like conditions at important manufacturing sites in Texas forcing plants to cutdown production rates.

However, the prices of polyethylene for February are expected to trace a V-shaped recovery as major manufacturers including LyondellBasell and Dow Chemicals could revise their prices upward in expectation of subsidence of the new wave of pandemic and the possible recovery in polyethylene demand from Northeast Asia.