Shell considering new plant in Singapore

Shell seeking JV partners for new plant
Singapore being considered for the SMPO facility
Ronnie Lim, Business Times 30 Jun 08;

A factor favouring Singapore for the SMPO investment will be the availability of feedstocks like ethylene, propylene and benzene from Shell's new US$3 billion petrochemical cracker which is currently being built and scheduled to start operations in late 2009 or early 2010.

SHELL Chemicals is talking to potential partners for a significant new styrene monomer/propylene oxide (SMPO) facility - expected to cost at least US$500 million - which could be built in Singapore, a senior executive told BT.

Its general manager for SMPO & derivatives, Fang Yea-Yee, said that the strong Asia-Pacific demand for SMPO - which are chemical intermediates used to make final products such as polystyrene containers and rubber soles - underpins the project.

'A lot of work is going on, and we are in discussions with possible joint venture partners,' he said, elaborating on news that first emerged last month of the planned SMPO investment.

Iain Lo, its vice-president, ventures and developments for the Asia Pacific/Middle East, had told BT in May that a 'decision is expected soon' on the project.

Singapore - one of Shell's main refining and petrochemical hubs - is being considered as the investment site, but has to compete with others in the Middle East and Asia.

While Mr Lo did not give project details, he indicated that to be economic, the new SMPO investment should ideally be as large as Shell Chemical's world-scale, US$500 million Ellba Eastern joint venture with Germany's BASF on Jurong Island.

Ellba has a production capacity of 250,000 tonnes of PO and 550,000 tonnes of SM.

Mr Fang declined to say which companies Shell Chemicals was trying to get aboard its latest SMPO project, and whether it was considering different joint venture partners depending on the site chosen.

A BASF spokesman contacted by BT earlier last week said that it was not in discussions with Shell at this point of time on the latest SMPO investment.

A factor favouring Singapore for the SMPO investment will be the availability of feedstocks like ethylene, propylene and benzene from Shell's new US$3 billion petrochemical cracker which is currently being built and scheduled to start operations in late 2009 or early 2010.

Having an integrated manufacturing hub will be an advantage in the competitive SMPO market, Mr Fang told a petrochemicals conference in Bangkok recently.

'Shell believes the strong growth in Asia-Pacific demand for both styrene and propylene oxide will continue to create attractive opportunities for new SMPO investments,' he said.

Overall, regional growth remains robust - especially with China remaining the major global growth engine for styrenics - and Shell sees this trend continuing for the long-term, he added.

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