SINGAPORE (Reuters) - Exxon Mobil Corp (XOM.N) said on Thursday it has reached an agreement to buy a refining and petrochemical plant owned by Jurong Aromatics (JAC) in Singapore that will boost its output and meet demand in Asia.
The company expects to complete the transaction in the second half of 2017, boosting its aromatics production in Singapore to more than 3.5 million tonnes per year (tpy), including 1.8 million tpy of paraxylene, a raw material for textiles and bottles.
The plant will be integrated with Exxon Mobil’s existing petroleum complex on Jurong Island, said Gan Seow Kee, chairman and managing director of ExxonMobil Asia Pacific Pte Ltd.
Singapore houses Exxon Mobil’s largest refining-petrochemical complex with a crude oil processing capacity of 592,000 barrels per day and two steam crackers.
The Korea Herald reported in March that Exxon Mobil had outbid Lotte Chemical Corp (011170.KS) with a price of 2 trillion won or about $1.7 billion for the JAC plant.
Exxon’s spokeswoman said it is not the company’s practice to discuss details of its commercial transactions.
JAC’s condensate splitter and petrochemical units - at a construction cost of $2.4 billion - started operations in Asia in 2014 to produce paraxylene to meet demand from textile and bottle manufacturers in China.
JAC’s debt mounted, though, as commodities went into freefall in the middle of that year, and it stopped operations at end-2014 to fix a technical issue. Its lender BNP Paribas appointed accounting firm Borelli Walsh as the receiver and manager of JAC.
Reporting by Florence Tan; Additional reporting by Seng Li Peng and Minerva Lau; Editing by Tom Hogue