UPDATE 1-ExxonMobil completes Singapore chemical plant expansion

SINGAPORE, May 30 (Reuters) - ExxonMobil said on Thursday it started ethylene production at a new chemical unit in Singapore, marking the completion of a multi-billion dollar expansion project at its Singapore petrochemical complex.

With the start-up of a 1 million tonne per year (tpy) steam cracker, the company will increase production at other petrochemical units in the complex on Jurong Island over the next few weeks, it said in an emailed statement.

The expansion adds production of at least 1.4 million tpy of polymers and elastomers, which have already entered commercial operation.

The complex is now the ExxonMobil’s largest globally and will produce about 2.6 million tpy of petrochemicals aimed at meeting regional demand.

The project had been scheduled to start operation at the end of 2011, but it was delayed due to its complexity and a weak economic outlook, industry sources said.

Ethylene is a feedstock for producing polymers used in plastics production.

Traders said there may be some short-term downward impact on petrochemical prices from the start-up, although one Singapore-based trader said ExxonMobil is likely to run the ethylene through its own systems.

“As long as the polymers margins are doing fine, Exxon should not be flooding the market with ethylene,” said the Singapore trader.