ExxonMobil’s Singapore resid upgrade project on track for 2025 start-up

SINGAPORE (ICIS)–ExxonMobil is on track to start commercial production at its latest upgrade project for lubricant base stocks in Singapore in 2025 after facing construction delays due to the pandemic, according to a company official.

The company’s Singapore Resid Upgrade Project “is progressing well and still on track for 2025,” Pascal de Bast Thiers, ExxonMobil’s business readiness manager for the project, told ICIS.

The project adds around 20,000 bbl/day capacity for light, heavy and extra-heavy lubricant base stocks at its integrated refining and petrochemical complex in the southeast Asian country.

The project will bring additional supplies of ExxonMobil’s EHC 50 and EHC 120 grades to the market, and up to 6,000 bbl/day of extra-heavy base stocks, including a new Group II base stock EHC 340 MAX.

The project was initially scheduled for start-up in 2023 but was delayed due to the COVID-19 pandemic which caused workforce disruptions, he said.

The pandemic also “really impacted demand” for the base stocks and downstream lubricant sectors, with the Russia-Ukraine war adding to short-term volatility, de Bast Thiers said.

“When we look at demand now we know that there is short-term variability, but when we look at the long term, we see strong resilience for lubricant demand,” he said.

In the passenger vehicle lubricant market, demand is expected to peak and eventually over the next decade, with the transition to electric vehicles in particular affecting demand, de Bast Thiers said.

Commercial and industrial demand for lubricants will drive the market in the long term, supported by the continuing rise in the middle-class population, especially in the Asia Pacific, he said.

“Demand for goods and the demand for personal and transportation of goods will continue to grow, so we see resilience in the commercial vehicle lubricant demand,” he said.

“If you move to the industrial and marine segments, we see demand continuing to grow in these segments,” de Bast Thiers said.

Industrial demand for lubricants is expected to grow at an annual average rate of about 1% from 2010 to 2035, he said, adding that from the commercial vehicles and marine segments demand is projected at about 0.8%.

“We see a continuing shift towards higher quality lubricants and hence, higher quality base stocks where we see Group II continuing to be the workhorse of the industry,” de Bast Thiers said.

Within Asia, India’s rapid population growth and a projected fourfold increase in its GDP through to 2050 will be a key driver for lubricants demand, he noted.

“We also see quality requirements going up … in India with fuel economy,” the ExxonMobil official said, citing the recently implemented Bharat-6 emissions standards.

Fuel economy refers to the efficiency with which a vehicle uses fuel to travel a certain distance. Vehicles with better fuel economy consume less fuel, resulting in lower fuel costs and reduced emissions.

India’s Bharat Stage (BS) Emission Standards regulate tailpipe emissions of air pollutants.

On the supply side, base stocks production has improved with the gradual return of fuel demand from the slump at the height of the pandemic, he said.

The Russia-Ukraine conflict has also impacted the supply of oil feedstock to refiners in some geographies as Rusian crude represents about 10% of overall crude production globally, he said.

“Now with the return and fuel demand that we’re seeing, raw material availability for manufacturing base oils is returning to historical levels,” de Bast Thiers said.

Interview article by Nurluqman Suratman

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