Singapore committed to Jurong oil storage project

It is looking at other solutions to solve land shortage problem: Iswaran
Ronnie Lim, Business Times 13 Mar 09;

THE government is committed to the Jurong Rock Cavern (JRC) oil and petrochemical storage project and is looking at other creative solutions such as floating oil storage to alleviate the land shortage on Jurong Island, Senior Minister of State for Trade and Industry S Iswaran said yesterday.

He was responding to media queries on what the government can do for investors who have been unable to secure land on the island for storage. Only those who bring higher value-added activities, such as oil refining or petrochemical production, have been able to obtain sites.

Mr Iswaran was officiating at the opening of Horizon Singapore Terminals following the recent completion of its third phase. Horizon earlier planned to build another petrochemical storage terminal but has not been able to secure land.

Mr Iswaran said: 'At the end of day, the government's investments and facilitation of this kind of infrastructure - whether floating or underground oil storage - is driven by the overall value proposition to the industry. Clearly, that depends in turn on global market conditions.

'The key consideration in all this is to make sure we have a suite of options. We work with industry to make sure which offers the best value proposition. That's how JTC has to proceed - it has to make sense for businesses and for Singapore.'

Despite protracted delays with the $700 million JRC - with JTC Corporation now saying that it will pick the main contractor and operator only by June - Mr Iswaran said that the project is 'something we've already committed to, and the work proceeds'.

'How it will essentially be used will be a function of demand, market conditions and business plans of individual companies working together with our agencies,' he said.

The first phase of JRC is expected to provide 1.47 million cubic metres of oil storage - more than Horizon Singapore's 1.24 million cu m - with a second phase adding another 1.32 million cu m.

Saeed Khoory, chief executive of Emirates National Oil Company, the leading player in Horizon Singapore Terminals, said that there is an acute shortage of oil storage here.

The project has helped boost oil trading in Singapore, he said. Before recent investments in storage, the value of physical oil traded through Singapore was about US$150 billion in 2005. This had doubled to US$300 billion last year, after more than five million cu m of storage was added over the three years.

Horizon Terminals chief executive Yusr Sultan said the Singapore facility is its largest investment outside the United Arab Emirates.

Horizon, which is bidding to operate the JRC, hopes to leverage on its relationship with Gulf producers to get them to use Singapore's underground storage, he told BT. But it has not yet started talking specifics with any party.

On JTC's plan to build floating oil storage, Mr Sultan said Horizon does not have much experience with this but will not rule out participating in the project.

'We will look at the technicalities once Singapore finalises the design,' he said. 'That could prove a viable alternative if it is technically feasible, although we have to assess the market at that time.'

Iswaran: Growth may be minus 5%
Yang Huiwen, Straits Times 13 Mar 09;

GROWTH could be at the lower end of the Government's forecast of minus 2 per cent to minus 5 per cent this year, said Senior Minister of State for Trade and Industry S. Iswaran yesterday.

He said recent trends suggested 'the lower end of the range' looks more likely now but the ministry will have a better idea once first-quarter data comes in.

Mr Iswaran was talking on the sidelines of an event that augers well for the local economy - the official opening of Horizon Singapore Terminals (HST).

The $470 million storage terminal on Jurong Island was built by United Arab Emirates (UAE) firm Horizon Terminals to store refined petroleum products such as fuel oil and gasoline. It has a capacity of 1.24 million cubic metres, making it the largest storage terminal outside of the UAE, said Horizon Terminals chief executive Yusur Junaidy.

The terminal - comprising 59 tanks and four jetties - was built in three phases and started operating in October 2006. It just completed its third and final phase. 'The completion of Horizon Singapore Terminals comes at a time of acute shortage of oil storage capacity that was potentially hampering the volume of physical oil being traded through the country,' said Mr Saeed Khoory, group chief executive of HST's parent, the Emirates National Oil Company.

Mr Khoory, who also chairs the HST board, said a wave of terminal investments has sharply lifted the value of offshore physical oil traded through Singapore, the world's No. 3 refining and oil trading hub.

It was about US$150 billion in 2005 but had doubled to US$300 billion (S$462 billion) last year thanks to the addition of over five million cubic metres of storage capacity over three years.

The demand for storage is even more relevant given weakening consumption of refined petroleum products, Mr Khoory added, pointing out that his firm's tanks are '100 per cent full'.

Unfortunately, the scarcity of land on Jurong Island makes it difficult to further expand operations here, said Mr Khoory.

Mr Iswaran said the Government is 'looking for creative solutions' to increase oil storage capacity.

JTC Corporation, which is responsible for the island's broad-based industrial property market, has identified underground rock caverns as an alternative storage facility.

It is also looking offshore at what are known as 'very large floating structures' to store oil products and petrochemicals.