Energy giant ExxonMobil's extensive operations in Singapore are to get a major boost with the purchase of the assets of troubled Jurong Aromatics Corporation (JAC).
JAC owns a refining, petrochemical plant on Jurong Island that is one of the largest in the world.
The acquisition is expected to be completed in the second half of this year, said ExxonMobil in a statement yesterday. It did not disclose the sum involved in the deal.
"Integration of this aromatics plant with ExxonMobil's existing manufacturing facility will provide product and logistical synergies that will enable our continued growth and competitiveness," said Mr Gan Seow Kee, chairman and managing director of ExxonMobil Asia Pacific.
"Our decision to acquire the facility is also indicative of the advantages Jurong Island provides for the petrochemical and refining industry, as well as Singapore's importance in global trade and economic progress," he added.
Singapore is home to ExxonMobil's largest integrated refining and petrochemical complex, which has a crude oil processing capacity of 592,000 barrels a day, and includes two world-scale steam crackers.
Number of years ExxonMobil has operated in Singapore. It is one of the country's largest international manufacturing investors.
The acquisition of the JAC aromatics complex, which has an annual production capacity of 1.4 million tonnes, will increase ExxonMobil's Singapore aromatics production to over 3.5 million tonnes a year, of which 1.8 million tonnes is paraxylene - a raw material used to make fabrics as well as plastic bottles.
The addition to ExxonMobil's operations here will also help the company better serve its customers in key Asian growth markets, said Mr Matthew Aguiar, senior vice-president of basic chemicals, intermediates and synthetics for ExxonMobil Chemical Company.
"We continue to make strategic investments that will ensure ExxonMobil is well-positioned to meet increasing global demand for chemical products," added Mr Aguiar.
JAC has been faced with a slew of problems since it opened in 2014. The US$2.4 billion (S$3.4 billion) facility on Jurong Island was forced to halt production for about 18 months in December that year, after running for just five months, to fix a technical issue.
In September 2015, JAC went into receivership as it struggled with debt problems in the face of a global commodity rout at that time, although it successfully restarted operations last July.
ExxonMobil said it is working to offer jobs to many qualified JAC employees.
"We have been working closely with the receivers and managers of JAC to keep employees informed about the transaction.
"Their knowledge and expertise will help ensure the safe and reliable operation of the plant," Mr Gan said.
ExxonMobil has operated in Singapore for more than 120 years and is one of the country's largest international manufacturing investors. Its integrated petrochemical complex in Singapore can process a wide range of feedstocks, from light gases to crude oil.
Later this year, the complex will begin the phased start-up of new 230,000 tonne-per-year speciality polymers facilities that will produce halobutyl rubber and performance resins for adhesive applications.