ExxonMobil signs deal to build petchem plant, LNG terminal in China

Exxon Mobil Corporation’s logo on a monitor above the floor of the New York Stock Exchange. (Reuters pic)

BEIJING: ExxonMobil Corp has signed a deal to build a petrochemical complex and liquefied natural gas (LNG) terminal in southern China, local media reported, the second major foreign investment in the world’s top chemical market in as many months.

The preliminary deal was signed with the local governments of Guangdong province and Huizhou city as well as state power company, Guangdong Yuedian Group, according to the Guangzhou Daily.

China is allowing greater access by global majors and local independents to its massive chemicals market to feed plastics, coatings and adhesives to the fast-growing consumer electronics and automotive sectors.

Exxon would be one of the first international oil majors to invest in LNG infrastructure in China as the country tries to shore up supplies amid a switch to gas-fired boilers by factories and households as part of the government’s effort to wean the country off coal.

Exxon chairman and chief executive Darren Woods was at a signing ceremony with provincial party secretary Li Xi and governor Ma Xingrui, the paper said.

Exxon’s plan comes after a similar agreement announced in July by German chemical giant BASF to build a US$10 billion (RM41.48 billion) plant, also in Guangdong and including a steam cracker producing 1 million tonnes a year of ethylene.