Singapore’s Jurong Island aims for competitive feedstock

US-based ExxonMobil is building a 1m tonne/year flexible-feed cracker at Jurong Island, Singapore

A liquefied petroleum gas (LPG) terminal in Jurong Island is being looked at to facilitate petrochemical feedstocks. Bio-based options are also being considered

Singapore is keen on making available competitive feedstock to major petrochemical players that set up operations within the city-state, exploring the feasibility of building a liquefied petroleum gas (LPG) terminal in Jurong Island.

The project is part of Jurong Island version 2.0 (JI v2.0) from Singapore’s Economic Development Board (EDB) that will map out the development of the energy and chemical hub for the next 10-15 years.

“We are facilitating industry players to evaluate the feasibility of an LPG terminal on Jurong Island. The main driver for this is to increase the competitiveness of the industry on [the island] by offering LPG as an alternative and competitive feedstock on a long-term basis,” says Liang Ting Wee, director for energy and chemicals at the EDB.

Liang says that discussions between industry players and terminal operators are being facilitated to evaluate the technical and commercial feasibility of an LPG terminal there.

The construction of US-based ExxonMobil Chemical’s 1m tonne/year flexible-feed cracker is underway at the site, while Anglo-Dutch energy and petrochemical firm Shell’s mixed-feed 800,000 tonne/year ethylene plant in Bukom Island, that started up in March 2010, may be due for expansion in three years’ time. ExxonMobil’s ethylene plant is due to start up some time in 2012, with feedstocks to be ­chosen based on economics.

CRACKER CONSTRUCTION
The company’s second petrochemical project in Singapore also includes two 650,000 tonne/year polyethylene (PE) plants, a 450,000 tonne/year polypropylene (PP) plant and a 300,000 tonne/year specialty elastomers unit. These plants are expected to start up in phases throughout next year, with the cracker being the last to come on stream.

The mechanics for the polymer plants have been completed and the units are now in the commissioning phase, says Georges Grosliere, venture director for the project at ExxonMobil.

The project also includes an aromatics extraction unit that can produce 340,000 tonnes/year of benzene, as well as an expansion of ExxonMobil’s oxo-alcohol capacity by 125,000 tonnes/year and its paraxylene (PX) output by 80,000 tonnes/year at the site. The site will also have a 220MW power co-generation unit. “Our plan is to ensure that the whole second petrochemocal site will be in operation in the second half of 2012,” Grosliere says.

The cracker is flexible in its use of feedstock, with the olefins output expected to feed into downstream units, he says, adding that any opportunities to sell at better margins would be considered.

As ExxonMobil intends to start up the downstream units first, buying feedstock is an option while the new cracker is not yet in operation, says Grosliere.

Liang says: “We are keeping a close watch on market and technology developments, and are keen on new options that could develop gas as competitive alternative feedstock for the industry.”

An LPG terminal would complement the naphtha feedstock that crackers in Singapore use. “We are also keeping a watch on developments such as methanol-to-olefin (MTO) technologies that could allow gas to be used indirectly as a feedstock source,” Liang says. Bio-renewables also present an option for ­providing competitive feedstock. “We believe that Singapore’s geographical position in a ­region rich in biomass, strong logistics ­connectivity, coupled with integration opportunities to our chemical industry will present interesting opportunities for companies,” Liang says.

More than 20 years since Jurong Island was conceived, the site continues to be a magnet for investment for players seeking to boost their presence in southeast Asia, and even cornering a big chunk of the Chinese market.

“We wish today Jurong Island has more space to grow. We wish we could accommodate the expansions of existing players and entrants of new players,” said Lee Yi Shyan, Singapore’s minister for trade and industry and national development, in a June 3 speech. To date, Jurong Island has generated more than $40bn (€28bn) in fixed asset investments and is home to operations of 95 companies from all over the world, according to the EDB.

OTHER EXPANSIONS
Japan-based chemical company Asahi Kasei just started construction of its 100,000 tonne/year solution-styrene butadiene rubber (SSBR) plant at the site. The first phase of the project is a 50,000 tonne/year line that will come on stream in June 2013, while the second line is due for start-up in early 2015.

Germany-based chemical firm LANXESS announced a €200m ($283m) investment to build the world’s largest neodymium polybutadiene rubber plant in Singapore. The plant, with 140,000 tonnes/year capacity, is scheduled to come on line in the first half of 2015.

The company also has a 100,000 tonne/year butyl rubber plant that is currently being built at the site. In early March, Finland’s Neste Oil inaugurated its largest biodiesel plant in Singapore. The 800,000 tonne/year plant will used a mix of palm oil, stearin and palm fatty acid distillate from Southeast Asia, as well as animal fat imported from Australia and New Zealand, as feedstocks.

Jurong Island is an amalgamation of seven smaller islands through land reclamation done in mid 1990s.

“Our success to date has been very much built upon a foundation premised on an integrated ‘plug-and-play’ environment.

“Companies can benefit from a well-developed infrastructure and reap synergies through product integration and shared ­services provided by third-party providers,” Liang says.

Meanwhile, the EDB also aims to develop Singapore as a liquefied natural gas (LNG) hub, with the first phase of a Singapore dollar (S$) $1.05bn ($848m) terminal expected to be ready by 2013.

Building the terminal with a 6m tonne/year capacity is a means of diversifying the country’s options for imported gas for its growing energy demand, Liang says.

“The current projected demand baseload for LNG in Singapore will primarily be for power generation and less as a feedstock for the chemical industry,” he says. A proposed creation of a new petrochemical hub in ­neighboring Malaysia – dubbed Refinery and Petrochemical Integrated Development (RAPID) – may prove to be beneficial for companies with operations in Singapore.

LNG TERMINAL
Malaysia’s state-owned oil and gas firm PETRONAS announced a plan for a $20bn project in Pengerang, southern Johor, with a detailed investment plan to be drawn up by the second half of 2012 or early 2013.

The site may also include a liquefied ­natural gas (LNG) terminal.

“While some may only see the new petrochemical hub in Johor to be direct competition to Singapore, we believe that this development could also present interesting new opportunities to complement the energy and chemical industry in Singapore,” Liang says.

This may mean better access to regional feedstock, as well as growing trade flows in the region.

“What is important is for Singapore to continue to develop differentiating competitive advantages to stay ahead of competition,” says Liang. “This is the focus for initiatives like the JIv2.0 initiative.”

The energy and chemical industry accounts for almost 2.5% of Singapore’s GDP and 30% of the country’s manufacturing output.

“JI v2.0 will focus on investments in new infrastructure developments and system-level optimization of valuable resources like energy, carbon, water and land,” Liang says.

With a strong track record in intellectual property rights protection, Singapore is “fast gaining ground as a partner for chemical companies to launch and commercialize proprietary technologies,” he adds.