Soxal to build $250m hydrogen plant on Jurong Island

Matthew Phan Business Times 16 Jan 08;

(SINGAPORE) Neste Oil's decision, announced a month ago, to build the world's largest biodiesel facility in Tuas, is already yielding add-on investment.

At a joint press conference yesterday, Singapore Oxygen Air Liquide (Soxal), a subsidiary of French- owned Air Liquide, said it would invest $250 million to build Singapore's first world-class hydrogen facility on Jurong Island to support Neste, as well as other refiners in the area.

Hydrogen is used to reduce the sulphur content in automotive fuels, and refiners will need it to meet increasingly stringent vehicle emission standards in Singapore, like the Euro IV, Soxal's regional director for South-east Asia, Lee Chun Wah, told BT.

It is also needed to process heavy crude oil into usable fuels, and is used by the chemical industry as well.

Soxal's investment will more than double existing hydrogen capacity in the Jurong Island and Tuas area, said Mr Lee.

The plant, called a Steam Methane Reformer, will produce some 100,000 cubic metres of hydrogen per hour.

Soxal will also build a 30km-long pipeline network from the plant on Jurong Island to Neste's upcoming biodiesel plant in Tuas. The pipeline will serve other refining customers along the way.

Currently, hydrogen capacity on Jurong Island is largely 'merchant business', which means the refiners build their own in-house hydrogen plants, said Mr Lee. There are a few small third-party providers, including Soxal, which have only about 5,000 cu m per hour of capacity.

Hydrogen production is capital intensive. The plant will employ 20-30 highly skilled engineers when completed, he said.

Soxal will start construction soon and complete the plant by 2010, in order to support Neste's biodiesel plant, which is scheduled to come onstream by the end of that year.

Neste's plant will cost some $1.2 billion and have a designed capacity of 800,000 tonnes a year of NExBTL, its proprietary clean diesel fuel.

Fielding several questions about the rising price of crude palm oil, which will be the plant's main feedstock, Risto Rinne, president and CEO of Neste, said the firm's technology allows it to use many different feedstock - from vegetable oils like jatropha, to algae, or even animal fat - to produce biodiesel.

When the plant comes onstream in 2010, 'it won't be only palm oil', he said. 'There will be other feedstock by that time.'

Nonetheless, over 50 per cent of the plant's feedstock will be palm oil, he estimated.

According to Reuters, crude palm oil prices rose over 50 per cent in 2007, and touched recent highs of over $1,000 a tonne. In Singapore, a 600,000 tonne biodiesel plant owned by Australia's Natural Fuel is running at just 10 per cent of capacity, Reuters said, quoting a market source close to the company.

Mr Rinne said Neste, which is based in Finland, will source palm oil from Malaysian and Indonesian suppliers certified by the Roundtable on Sustainable Palm Oil.

Biofuel plant draws $300m in spin-offs
Nicholas Fang, Straits Times 16 Jan 08;

NESTE Oil's $1.2 billion biofuel plant in Tuas will not be ready until 2010, but the mega facility has already generated close to $300 million worth of spin-off projects.

Singapore gas firm Soxal, which is wholly owned by Paris-listed Air Liquide, said yesterday that it is building a $250 million steam methane reformer to produce hydrogen for the Neste Oil project. The plant is Soxal's largest single investment in the company's 91-year history in Singapore.

Air Liquide's regional director, Mr Lee Chun Wah, said Soxal will also build and run a carbon dioxide purification and liquefaction unit at the Neste Oil plant.

This will capture waste products such as carbon from the biofuels production process. This can then be sold to other markets such as dry- ice producers and medical firms.

'The unit will cost a further $40 million to $50 million,' said Mr Lee yesterday. 'Both plants will be up and running by 2010 to support the Neste Oil operation.'

Air Liquide's group senior vice-president for the Asia-Pacific, Mr Jean-Pierre Duprieu, said the group was focused on helping clients improve process efficiencies and meet environmental responsibilities.

The Neste Oil plant has an annual capacity of 800,000 tonnes of its proprietary renewable diesel NExBTL, making it the largest facility of its kind in the world.

Construction is expected to begin within a few months. It will mainly use palm oil to make its clean diesel, which is reputed to have lower exhaust emissions and so contributes to better air quality.

Neste Oil president and chief executive officer Risto Rinne said the company aimed to use only raw materials from sustainable sources. 'We will work only with partners who provide raw materials that are certified as sustainable.'

His remarks were in response to concerns that Neste Oil's reliance on palm oil could contribute to tropical rainforests being felled to clear land for palm oil cultivation, thereby actually damaging the environment further and leading to the loss of biodiversity.

Neste Oil focuses on biodiesel
Today Online 18 Jan 08;

Biodiesel is a key growth area Finnish refiner Neste Oil will be focusing on in the coming years, despite concerns among other biodiesel manufacturers that soaring feedstocks costs could eat into margins.

With advanced technologies, the company has an option to use various raw materials, from currently expensive palm oil to cheaper animal fats, as feedstocks at its biodiesel plants, which will help maintain profitability, said president and chief executive officer Risto Rinne. "This is one of the strong points which we have," he said.

"We think we can get enough margin between the product and raw materials, because we are not just depending on palm oil," he added.

Palm oil is the most widely-used feedstock for biodiesel. Benchmark crude palm oil futures prices rose about 50 per cent last year, forcing some biodiesel producers to find alternative feedstocks and delay construction of new plants.

Demand for biofuels is also expected to grow in line with global efforts to fight climate change, which will help the biodiesel market expand globally beyond Europe, said Mr Rinne. "Climate change ... needs a global solution. That means globally, biodiesel or biofuels in general are growing."

The company will start building what will be the world's largest biodiesel plant in Singapore in the first half of this year, aiming to bring it online in 2010. It will spend 550 million euros ($1,158) to build the plant, which will have an annual capacity of 800,000 tonnes.

The biodiesel produced will be sold mainly to Europe and the United States west coast.

He added, however, demand in Asia is also expected to grow, citing Japan as a potentially major market in the region. — Dow Jones