JTC tender for floating storage on the way

Phase two project studies over; Pulau Sebarok likely site
Ronnie Lim, Business Times 30 Mar 10;

SIGNALLING practically a go-ahead for offshore oil/petrochemicals storage here, JTC Corporation said it is now progressing to prepare construction tenders for the very large floating structures (VLFS), following its completion this month of phase two project studies.

'Moving forward, JTC is targeting to call a tender for the technical consultant in the second quarter,' a JTC spokeswoman told BT yesterday.

'The work scope for the technical consultant would include looking into the front-end engineering design as well as calling of the engineering, procurement and construction (EPC) tender,' she added.

She said this in response to BT queries on whether JTC had made a final decision to proceed with the floating oil storage project - as it had earlier said it would - following the completion of its phase two studies at end-March.

But JTC declined to say more, including specifics like when it expects to embark on actual VLFS construction.

Still, there is strong rationale to proceed with the project, given the limited land available here to satisfy traders' demand for additional on-shore storage in the oil hub here. This has led to many Singapore-based trading firms setting up tankfarms in neighbouring Johor instead.

The VLFS will most likely be anchored off Pulau Sebarok, which it earlier identified as a potential site for the project.

Sebarok - currently being used for on-shore oil storage by Dutch tankfarm operator Vopak and PetroChina-owned Singapore Petroleum Company - is very close to Shell's Bukom refinery and not far from Jurong Island, Singapore's main oil and petrochemicals hub.

JTC's just-completed phase two studies covered environmental impact, engineering design, business model and security aspects.

It followed phase one studies, completed in late-2007, which showed VLFS to be technically feasible and comparable in cost to land-based oil storage. Its earlier cost estimate for a VLFS was at least $180 million.

Some industry officials, however, argue that the cost of building a VLFS - estimated at US$400 per cubic metre of storage - is slightly more than the US$300 per cu m cost of building an onshore tank, depending on steel prices.

The JTC studies had ascertained that to be economical, the minimum storage capacity of a VLFS should be 300,000 cubic metres, or equivalent to that of a very large crude carrier. VLFS would comprise two rectangular modules, each measuring 180m by 80m by 15m and with 150,000 cu m capacity.

JTC, meanwhile, has also started building the $890-million first phase of Jurong Rock Cavern (JRC) to store oil underground. Comprising five caverns, the JRC project - considered more for strategic oil storage - will offer 1.47 million cu m when completed in 2014.