Shell launches new chemical plant

Robin Chan, Straits Times 12 Dec 09;

"The Government had been aware of the project's environmental impact before it made its carbon emissions proposals"

SHELL'S multi-billion-dollar integrated petrochemicals complex came a step closer to realisation yesterday, with the official launch of a new chemical plant on Jurong Island.

The mono-ethylene glycol (MEG) plant is Shell's largest, with a production capacity of 750,000 tonnes a year.

It is also the first to use a more efficient process that converts ethylene to MEG in a more environmentally friendly way, consuming less steam and producing less carbon dioxide and by-products.

Trade and Industry Minister Lim Hng Kiang told the opening ceremony: 'Against the backdrop of the Copenhagen summit, such environmentally friendly processes will increasingly become a necessity.'

The Government pledged last week to cut carbon emissions by 16 per cent from its 'business as usual' levels if a deal is reached in Copenhagen. This is despite Singapore contributing only 0.2 per cent of the world's global carbon emissions.

Shell Chemicals' vice-president for new business development and ventures, Mr Iain Lo, told a press conference that the Government had been aware of the project's environmental impact before it made its carbon emissions proposals.

'Specifically for this project, we have already done an environmental assessment study,' Mr Lo said. 'That has been provided to the Government, so it's quite apparent the impact this project has on total emissions in Singapore.'

Mr Lo said Shell had already reduced its own emissions levels to 30 per cent below its 1990 levels.

'A lot of programmes around reducing flaring, increasing energy efficiency, are things we are doing to reduce our own carbon footprint,' he said.

Plans for a second styrene monomer/propylene oxide (SMPO) plant also seem to be on hold for now.

Mr Lo said: 'The downturn has clearly affected the timing of investments. We'll have to wait for the investment outlook to improve before we make a decision.'

While declining to say at what capacity the MEG plant will be running, Mr Lo said Shell was comfortable that it has 'sufficient customers to lift the capacity of the plant'.

The chemical MEG is widely used in manufacturing - from making the polyester used in shirts, to plastic bottles.

It will be exported mainly within the region, where 70 per cent of the world's output is consumed and is growing at 6 per cent a year. Global demand last year was 18 million tonnes.

The MEG plant, which began operations last month, will pipe its own ethylene from nearby Pulau Bukom to Jurong Island upon completion of the Shell Eastern Petrochemicals Complex's (SEPC) main facility - an 800,000 tonne ethylene cracker plant on Bukom on track for a first quarter of next year completion.

The SEPC is Shell's largest investment in Asia and includes upgrading of Shell's Bukom refinery, as well as a new 155,000 tonnes a year butadiene plant on Bukom.

While Shell has declined to state the exact value of its investment in the SEPC beyond 'a few billion dollars', unofficial figures value it at US$3 billion (S$4.1 billion).

Shell has had a presence in Singapore for more than 120 years.

Shell opens new mono-ethylene glycol plant on Jurong Island
Rachel Kelly, Channel NewsAsia 11 Dec 09;

SINGAPORE : Petrochemical giant Royal Dutch Shell on Friday said it will operate its new mono-ethylene glycol (MEG) plant in Singapore at reduced rates, in line with weak demand for petrochemicals.

But it expects to ramp up capacity at the so-called "MEG plant" early next year, when remaining parts of the Shell Eastern Petrochemicals Complex come on stream.

Shell would not say how much the complex costs, but reports have estimated it could be several billion US dollars.

Demand for MEG in the region has been growing at around 6 per cent annually, along with increasing consumer spending.

Shell believes its new MEG plant, which is part of the Shell Eastern Petrochemicals Complex, will position it to meet that demand.

Most of the MEG produced in Singapore will be consumed in the Asia Pacific, which accounts for 70 per cent of global consumption.

Ben Van Beurden, executive vice president, Shell Chemicals, said: "Together, our investment here and in China reinforces Shell's strategy to selectively grow our chemicals business to meet the needs of our Asia-Pacific customers."

The annual MEG production capacity of the plant is 750,000 tonnes, which is enough to produce over two million tonnes of polyester - or the equivalent of 7 billion shirts.

Shell said the plant will be the first to implement its patented processing technology which boosts commercial yields of MEG from ethylene in more environmentally-friendly ways.

Shell estimates that the process uses 20 per cent less steam and produces 30 per cent less waste water compared with traditional thermal conversion MEG plant with the same capacity.

Officiating at the opening of the MEG plant, Trade and Industry Minister Lim Hng Kiang said Singapore is committed to widening its lead as a global chemicals hub.

Mr Lim said: "Singapore is pressing ahead with investment in infrastructure to further enhance the integration of our energy and chemical industry ecosystem. We will enhance the robustness of operations on Jurong Island and optimise the use of precious resources such as energy, land and water."

Shell is among the largest foreign investors in Singapore. Its massive Shell Eastern Petrochemicals Complex includes the new MEG plant, a new Ethylene Cracker Complex, a butadiene plant, and modifications to the existing Pulau Bukom Refinery. - CNA/ms

Shell cautiously optimistic over $3b petrochem complex
Its ability to use feedstock from Bukom refinery makes it competitive
Ronnie Lim, Business Times 12 Dec 09;

SHELL Chemicals is 'cautiously optimistic' on market prospects for its new US$3 billion Singapore petrochemical complex that will be fully operating by the first quarter of next year, its London-based chief told BT yesterday.

While the Singapore project will run smack into a supply overhang, as new petrochemical complexes in the Middle East and China start up next year, global economies, especially China, are starting to recover, Shell executive vice-president Ben van Beurden told BT in an interview. 'There are plenty of signs for optimism. We can conclude that the worst is behind us.'

Shell is also confident that its new Shell Eastern Petrochemicals Complex (SEPC) here - its single biggest chemical investment and its biggest complex in this region - will be competitive given its ability to use cost-advantaged feedstock from Shell's Bukom refinery, with which it is highly-integrated.

This will give SEPC the flexibility to use different feedstock, from the heaviest and cheapest hydrowax to liquefied petroleum gas, as the economics shift.

SEPC will further strengthen Singapore's position as Shell's largest oil/petrochemicals manufacturing centre in the Asia-Pacific and 'underlines our intent to remain a leading petrochemical producer in this region', said Mr van Beurden.

He spoke to BT following the official opening of Shell's 750,000 tonnes per annum (tpa) mono-ethylene glycol (MEG) downstream plant on Jurong Island - an integral part of the SEPC investment.

Giving an indication of the MEG project's scale, he said that the plant can, for example, make sufficient intermediate feedstock to produce more than two million tpa of polyester - enough to make almost seven billion shirts. MEG also goes into making furnishings, polyethylene bottles, anti-freeze and coolants among other products.

'There's no market risk for MEG,' Shell Chemicals vice-president Iain Lo said at a press conference. Global MEG demand is expected to grow 1.5 per cent annually and 5.6 per cent in China in the coming five years, he said. Most of the MEG produced in Singapore is destined for the Asia-Pacific.

But the MEG plant will account for only about half the ethylene output from Shell's new 800,000 tpa cracker.

While Shell continues discussions with other downstream parties to make use of the remaining ethylene and propylene produced by the cracker, 'they are saying they need to wait a bit to see what happens (with markets)', Mr van Beurden said.

'Still, we are basically sold out for next year and are confident the plant will run at high utilisation,' he said, adding that some ethylene will go to local users, including returns to ExxonMobil under a swap deal, while some will be exported to north-east Asia next year and in 2011.

'But our objective is to keep the ethylene in Singapore (for other future downstream plants at SEPC) for the project's long-term robustness,' Mr van Beurden said.

Reflecting the still-uneven market recovery for various petrochemicals, Mr Lo said that the economic downturn has affected the timing of another planned investment by Shell - a potential US$500 million styrene monomer/propylene oxide (SMPO) plant that can use some of the feedstock from the SEPC cracker.

'Singapore remains a possibility for the project, but while there is some demand pick-up, we have to be confident about the outlook (for SMPO) first,' he said.

Some of the cracker's other product streams - such as isobutene and raffinate 1 - were also supposed to have been taken up by Germany's Lanxess for its planned synthetic rubber plant on Jurong Island, but that project has been delayed too.

'But this won't affect us immediately,' Mr van Beurden said, as alternative customers have been found. Lanxess last indicated that it will start building its 400 million euro (S$818.5 million) plant here around mid-2011 - a two-year delay.

Shell moves to start a chain reaction here
Its investments may attract new players; LPG terminal for Qatar gas possible
Ronnie Lim, Business Times 14 Dec 09;

(SINGAPORE) Shell Chemicals is looking at more value-added, downstream investments in Singapore which will be a catalyst for a significant, new 'high-purity chemicals corridor', and potentially attract more supporting players here, its London-based head said.

An example of a downstream investment is the production of high-purity ethylene oxide (or EO, used for making detergents and soaps).

Disclosing this in an interview, Ben van Beurden, its executive vice-president, also confirmed that Shell and its new Qatari partners in its earlier Petrochemical Corporation of Singapore joint venture, together with other parties here and the Singapore government, are looking at a possible LPG terminal here, to import the gas feedstock from Qatar, for the petrochemical industry here and the region.

'For Shell, Singapore is an absolute key, strategic site - which becomes ever more integrated and robust, and a platform to attract additional investments,' he told BT.

Mr van Beurden was here last Friday to officiate at the opening of the group's latest mono-ethylene glycol (MEG) plant - part of its new US$3 billion Singapore petrochemical complex, which will be fully operational by Q1 next year.

What Shell intends to do is to add value to this just-started MEG plant or an earlier ethylene glycols plant here. ' . . . we are studying the option of making higher-purity EO' at one of the plants, he said.

'There is a very clear market for high purity EO - which through ethoxylation, or putting EO on alcohols - is used for products like detergents or soaps. This is a very important region for doing this, because the alcohols come from palm-grown oil, so a lot of players are looking for high purity EO and facilities to do that.'

While he declined to give any investment numbers, he said that the overall payback will be significant. 'You are talking of very significant investment in this new cluster . . . because besides trade and employment etc, it attracts many small- and medium-sized industries as well.'

Furthermore, EO is also used to make polyols (a natural oil derived from vegetable oil and used to make polyurethanes), he added, and this ties in with the propylene oxide produced at its Seraya Chemicals plant here.

'We can also look at more things to do with the propylene oxide out of Seraya . . . So you see, once you have strong foundations, you find good reasons to add more things to it.'

Last month, state-owned Qatar Petroleum International (QPI) - with which Shell has a lot of dealings - took a half-share in Shell's stakes in Petrochemical Corporation of Singapore and The Polyolefin Company. BT later reported that this had to do with the possibility of Qatari liquefied petroleum gas being supplied to Singapore.

Confirming this, Mr van Beurden said that 'there have been a number of discussions with all parties concerned . . . Qatar, other market players here and the Singapore government on how it will make sense to bring in LPG from Qatar as a feedstock for the petrochemicals industry and it certainly looks extremely attractive for all parties concerned.'

'It is an extremely difficult thing to pull off . . . but we are all talking, and figuring how this should look like.

'We will need to aggregate demand from a number of players for it to have sufficient scale to make sense for an LPG import facility to be built and for it to be a very attractive and strategic outlet for the Qataris. But everybody is directionally in agreement that we should work on this,' he added.

While it is still early days, the Shell Chemicals chief added that such a terminal could potentially also service the wider Asian region, with Singapore becoming an important LPG hub.