Lower production costs and expanding economies have supported a decision by ExxonMobil Corp to focus its chemical investments in the Middle East and Asia. The developing economies of these regions are expanding over three times faster than the United States. As per an estimate by IMF, Asia's developing economies, excluding Japan, are expected to grow at 9.8% this year. Economies are expected to grow by 5.9% in the Middle East, 2.5% in the European Union and 1.9% in USA. Since raw materials and energy account for 70% of the cost of running a cracker, the Middle East region offers the advantage of cheaper natural gas as feedstock and Asia is home to the fastest-growing markets.
Exxon is building its largest facility in Singapore, an island state on the main route used by oil and gas tankers from the Middle East to Asia. Almost 50% of the output will be exported to China. Exxon will more than double its ethylene capacity in Singapore to almost 2 mln tpa when its second chemical complex is completed in 2011. Exxon's new plant can process a wider range of refined oil products, including gasoil and fuel oil.