ExxonMobil (XOM) To Upgrade Singapore Manufacturing Facility
Zacks Investment Research | Apr 03, 2019 07:46AM ET
Exxon Mobil Corporation (NYSE:XOM) has made a final investment decision with respect to the multi-billion dollar expansion of the integrated manufacturing complex in Singapore.
The investment relates to conversion of fuel oil and other undesirable crude product elements to enhance production of higher-value products as well as cleaner fuels with lower-sulphur content.
The Singapore facility accommodates the company’s largest refinery with a capacity of 592,000 barrel per day as well as the world’s only steam cracker capable of cracking crude oil. Moreover, the oil giant's biggest integrated petrochemical complex is located in the country. The expansion project is part of ExxonMobil’s plan to boost the downstream and chemical earnings potential of the Singapore facility.
ExxonMobil did not disclose the amount it plans to invest in the expansion project. Beginning 2020, the International Maritime Organisation (IMO) is establishing new rules on marine fuels, restricting the sulphur content to 0.5% from 3.5% to control pollution from ships.
Per the plan, the company will boost production capacity of cleaner fuels with lower-sulfur content by 48,000 barrel per day, which includes high-quality fuels. In order to meet the growing demand in the Asia-Pacific region,the expansion will augment ExxonMobil’s Group II base stocks capacity by 20,000 barrels per day.
Engineering, procurement and construction contracts have been awarded to Técnicas Reunidas for the new process units as well as Wood Group for interconnecting pipelines and supporting infrastructure facilities. As part of the project, the company is working on a long-term commercial agreement with Linde to upgrade residues from the site to hydrogen and synthesis gas.
The company has commenced engineering and procurement and construction, while operations are expected to begin in second half of 2019. The project is scheduled to come online in 2023.
Zacks Rank & Key Picks
Currently, ExxonMobil carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are Antero Resources Corporation (NYSE:AR) , CrossAmerica Partners L.P. (NYSE:CAPL) and SEACOR Holdings, Inc (NYSE:CKH) . While Antero Resources and CrossAmerica Partners sport a Zacks Rank #1 (Strong Buy), SEACOR Holdings carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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