Ultra-low sulphur gasoline upgrading projected to cost US$200-300m
Ronnie Lim, Business Times 19 Jul 08;
SINGAPORE Petroleum Company (SPC), together with its US oil giant partner Chevron, are going ahead to build their 'green' gasoline plant - expected to cost US$200-300 million - at their joint-venture Singapore Refining Company (SRC), BT understands.
Sources said that the go-ahead for the ultra-low sulphur gasoline (ULSG) upgrading project on Jurong Island has been given, and that SRC will be working towards finalising building contracts in the next few months.
SRC's latest ULSG project follows its award of a US$81 million contract in May to JGC Corporation to revamp its hydro-sulphuriser to enable it to produce ultra-low sulphur diesel (ULSD) of Euro-IV specification.
That earlier project represents just the first phase of a planned SRC upgrading plan - including producing green gasoline - which Chevron's head of global refining, Jeet Bindra, earlier said could cost as much as US$400 million in total.
The latest ULSG project will enable the 290,000 barrels per day (bpd) SRC refinery, which currently produces 30,000-40,000 bpd of gasoline, to convert and value-add about 20,000-30,000 bpd of this to 'green' gasoline.
Sources said that the premium for ULSG over ordinary gasoline varies, but can amount to 'several dollars per barrel'.
When SRC's ULSG upgrading is completed in 2010-2011, it expects to export the 'green' gasoline to environmentally conscious markets such as the US, Europe and Australia.
Meanwhile, SRC's ULSD upgrading is scheduled to be completed around the second half of next year.
In Singapore, the use of ULSD became mandatory since December 2005, although there is no legislated deadline yet for ULSG use here. Some neighbouring markets, such as Indonesia, Malaysia and Vietnam, are also studying the use of such clean fuels.
SRC - which had recently raised its refinery capacity by 5,000 bpd - wants to upgrade the 290,000 bpd refinery to further add value to its operations.
SPC CEO Koh Ban Heng, in an interview with BT in April, said that further down the road, the joint venture is also considering a coker plant, potentially costing US$300-400 million, to upgrade heavy fuel oil into more valuable products, including petrol and diesel.
