ExxonMobil is preparing to permanently close one of the two steam crackers at its large refining and petrochemical hub in Singapore, according to industry sources familiar with the company’s internal plans.

The move would affect the older cracker at the firm’s integrated Jurong refinery and Singapore Chemical Plant, a complex capable of processing 592,000 barrels of crude per day and producing close to 2 million tonnes of ethylene annually. The facility has been a major part of Exxon’s Asian operations since its commissioning in 2001 and expansion in 2013.

A shutdown would mark a major shift in the company’s regional strategy as global petrochemical margins continue to shrink. Excess capacity—driven largely by rapid buildouts in China—has weighed heavily on profits across Asia and Europe. South Korea has already urged its biggest producers to scale back, with leading firms agreeing to cut naphtha-cracking capacity by as much as a quarter.

Steam crackers convert naphtha into ethylene, propylene, and other key building blocks used to manufacture plastics and synthetic materials. With supply far outpacing demand, producers across the region have been forced to trim output or rethink operations.

ExxonMobil declined to confirm the reported plan, saying it does not comment on market speculation. If finalized, the closure is expected to take effect by mid-2026. The company has been undergoing global restructuring and aims to reduce its workforce by up to 15% by 2027.

The U.S. energy major has also been reshaping its downstream footprint. In October, it agreed to sell its Esso-branded fuel retail network in Singapore to Indonesia’s Chandra Asri Group.