ExxonMobil, Sabic to shutter European ethylene

The downturn in petrochemicals continues to hit Europe hard, as two of the continent’s largest petrochemical makers—ExxonMobil and Sabic—disclosed their intention to shutter ethylene plants.

A buildup in ethylene capacity globally, primarily the US and China, has caused profits to drop. Europe has borne the brunt of the downturn because of the region’s high cost of production. Especially high energy prices in the wake of Russia’s invasion of Ukraine have exacerbated Europe’s competitiveness problems.

Facing such pressures, ExxonMobil says it plans to close its ethylene cracker and derivatives units at its Gravenchon site in Port-Jérôme-sur-Seine, France, this year. The closure includes an ethylene steam cracker with 400,000 metric tons of annual capacity as well as downstream polyethylene and polypropylene plants. The complex has lost more than $530 million since 2018.

“Despite efforts to reduce costs and improve the site’s economics, it is not competitive,” the company says in a statement. “The configuration of the steamcracker, its small size compared to newer units, high operating costs in Europe and higher energy prices make it uncompetitive.”

The move will eliminate 677 jobs by 2025, ExxonMobil says. It plans to fully decommission the equipment and remediate the site. ExxonMobil’s Esso Gravenchon refinery nearby, which makes fuels for the French market, will remain open.

Sabic’s closure is more limited. It is taking down six units at its plant in Geleen, the Netherlands, for routine maintenance. The firm doesn’t plan on restarting its Olefins 3 cracker at the site and will disconnect it from the facility.

The company will restart its Olefins 4 cracker. A decade ago, the company spent about $150 million to modernize that plant, originally built in the 1970s, so that it could compete with newer plants.

Steve Lewandowski, vice president of olefins and derivatives for Chemical Market Analytics by OPIS, isn’t surprised by these maneuvers. The Sabic and ExxonMobil facilities facing closure are relatively expensive to run.

“We expect more shutdowns due to the overbuild over the last 4–5 years, and then more to come in 2027 and 2028 and beyond,” Lewandowski writes in an email. “Big pieces are moving on the chess board and the higher cost, lower margin sites are fully exposed to this.”