Although the company hasnt disclosed the projects size, industry sources have estimated it would add about 300,000 metric tons per year of Group II production capacity to a plant that had capacity to make 678,000 t/y of Group I oils. The project was originally announced in February 2017 and involves a plant on the island of Pulau Ayer Chawan. The company operates a 1.5 million t/y Group II plant on Singapores main island, in Jurong Industrial Estate.
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ExxonMobil has been adding a large amount of additional Group II production capacity at several locations around the world. In February it opened a 1 million t/y Group II plant in Rotterdam, Netherlands. In 2015 it completed Group II expansions of 300,000 t/y and 325,000 t/y, respectively at its plant in Baytown, Texas and Jurong Industrial Estate. And this April it made a final investment decision to proceed with a multi-billion expansion of its refining facilities in Singapore, which will include increasing its capacity to make API Group II base oils in Singapore by 1 million metric tons per year by 2023.
The upgrade announced today could add to a Group II surplus in the Asia-Pacific region. Some analysts say Group II supply in the region already exceeded demand when the Rotterdam plant opened and that the surplus increased then because ExxonMobil stopped shipping Group II from Singapore to supply European customers who had been lined up ahead of the Rotterdam opening.