Yahoo News 6 Mar 09;
SINGAPORE (AFP) – Diesel made from palm oil, vegetable oil and animal fat in Singapore may soon be powering cars in Europe and North America, Finland's Neste Oil said Friday.
Neste Oil, which is building the world's biggest biodiesel plant in the city-state at a cost of 1.2 billion Singapore dollars (776 million US), said it was also looking to market the fuel in Japan and South Korea.
The plant will have an annual capacity of 800,000 tonnes when it becomes operational next year.
It will produce Neste Oil's patented NExBTL renewable diesel which the company said is the cleanest diesel fuel in the world.
NExBTL can be used in all diesel engines and significantly reduces exhaust emissions compared with regular diesel, the company said.
The plant was originally planned to target the European market, Neste Oil deputy chief executive Jarmo Honkamaa told reporters during a media visit to the plant site, which is 30 percent complete.
"We know now already that part of the volume will go to North America... the west coast of Canada."
Company executives said the move towards cleaner fuel worldwide in a bid to reduce global warming was likely to drive demand.
Neste Oil was also talking with companies in Japan and South Korea to buy the renewable diesel, Honkamaa said, adding that Singapore would also be a potential market.
"I don't see that the marketing of this product is very challenging. The main challenges will be on the raw material side," Honkamaa said.
He said the Singapore facility could be beefed up to produce jet fuel from the same feedstocks if there was a need.
Renewable diesel would have a 200-300 US dollar premium per tonne over regular diesel but Neste Oil said there was demand because of the benefits of using cleaner fuel.
While crude oil prices have plunged from their peak at 147 dollars in July 2008 to current levels around 44 dollars, palm oil prices have also plummeted from 1,245 dollars per tonne a year ago to about 526 dollars a tonne.
Neste Oil chief executive Matti Lievonen said Singapore was chosen partly because its proximity to raw materials.
Singapore is close to Indonesia and Malaysia, the world's two leading crude palm oil producers.
Despite a global economic crisis, Neste Oil is in a healthy financial state, with a 1.6 billion euro (2.0 billion US) credit facility with European banks, Lievonen said.
Neste Oil is also building a renewable diesel plant with similar capacity in Rotterdam, the Netherlands which is expected to come on stream after the Singapore facility.
Biggest renewable diesel plant on track
Neste Oil's $1.2b project on time and on budget; firm to hire 100 staff
Elizabeth Wilmot, Straits Times 7 Mar 09;
THE Finnish energy firm building the world's biggest renewable diesel plant here says the project is still on track despite the economic downturn.
Neste Oil president and chief executive Matti Lievonen told a ceremony at the site yesterday that the $1.2 billion project was on time and on budget.
'The market has been highly unpredictable in the past year but the Singapore plant is an important part of our long-term strategy for growth and our commitment to seeing the project through remains absolutely solid,' added Mr Lievonen.
The plant is due to be finished next year and will allow Neste to use any vegetable oil or animal fat to produce renewable diesel.
Yesterday's ceremony involved burying a time capsule that contained, among other items, a copy of The Straits Times and Finnish and Singapore currencies.
Mr Lievonen reiterated that Neste is cashed up and will not have difficulty financing the plant.
Norway's Renewable Energy Corporation (REC) has started building its estimated $6.3 billion solar cell plant here. Last November, chief executive Erik Thorsen said the firm was concerned about financing for its second phase.
But Mr Lievonen said: 'Our company is very healthy in financing and our liquidity is secured until 2011.' The firm had other positive news too, announcing that it plans to hire up to 60 people by the end of this year with 100 in total to be employed by the middle of next year.
The renewable diesel project comes at a time when Singapore is playing an active role in the field of renewable energy. The Government has invested about $170 million to boost clean energy research and pledged $1 billion to fund sustainable development in the recent Budget.
Yesterday's guest of honour, Trade and Industry Minister Lim Hng Kiang, said: 'Despite the immediate challenges, we are confident that the outlook of the energy and chemicals industries remains positive.
'Singapore wants to grow our industries in a sustainable and responsible way. We may be a small city state lacking in natural resources, but we are committed in supporting the implementation and creation of technologies that can address the environmental challenges facing us.
'This could, in turn, lead to new energy solutions in niche verticals including solar and biofuels.'
The Economic Development Board echoed these sentiments in an e-mail to The Straits Times: 'The (Neste) project is very much in line with Singapore's vision to enhance our position as Asia's undisputed oil and oil products hub.
'Investments such as Neste Oil and REC will drive much growth in our renewables sector in terms of creating new and exciting career opportunities.'
Neste oil’s new $1.2b plant
Today Online 7 Mar 09;
Finnish energy firm Neste Oil has begun constructing the world’s largest renewable diesel plant in Tuas. The $1.2-billion plant will produce NexBTL biodiesel, which can be used in existing vehicle engines. Neste Oil will hire 100 Singaporean staff over the next two years. Channel NewsAsia
Neste basks in a green glow
Growing market for Singapore renewable diesel plant
Ronnie Lim, Business Times 7 Mar 09;
OTHER investors may be scrapping their projects but it's flashing 'green' for Neste Oil's $2.4 billion investment in Singapore and Rotterdam. The Finnish giant is brimming with confidence about its two renewable-diesel refinery plants that cost $1.2 billion apiece and that will start operations in 2010 and 2011 respectively.
In fact, it is already considering adding second lines at both to produce either more renewable diesel, or even renewable jet fuel for aircraft.
'We have no other competitor in 2G, or second-generation, biodiesel manufacturing,' Matti Lievonen, Neste's president and CEO, told media after a foundation stone-laying ceremony at its Tuas site. The two plants, when completed, will make Neste - until now, mainly a traditional oil refiner - the leading global producer of renewable diesel.
Both plants are 'on schedule and on budget', he said. Financing is not an issue at all, as Neste has a credit line of 1.6 billion euros (S$3.1 billion) until 2011, plus it has over 500 million euros in cash flow from last year.
Besides, given growing environmental concerns, the European Union is expected to pass legislation enforcing greater use of such renewable fuels soon. 'This is the whole logic for our renewable diesel - a market which mandates use of biofuels,' said deputy CEO Jarmo Honkamaa.
After earlier targeting 5.75 per cent mandatory biofuel use by 2010, the latest EU directive is that measures must be taken by all member countries to replace a minimum 10 per cent of all transport fossil fuels (petrol and diesel) with biofuels by 2010.
The Neste officials said this in response to questions on whether today's low oil prices of around US$40 - which means that normal diesel is roughly half the price of biodiesel - would impact the economics of its Singapore and Rotterdam biodiesel investments.
Each plant will produce 800,000 tonnes per annum (tpa) of renewable diesel - the largest such facility in the world - from one million tpa of renewable materials comprising vegetable oils such as palm oil, animal fat or tallow.
Neste - which operates two crude-oil refineries in Porvoo and Naantali with a total capacity of 260,000 barrels - already has a 170,000 tpa biodiesel plant at Porvoo, and is set to start up a second biodiesel plant of similar scale there this July.
'Neste is sourcing its biodiesel raw materials like palm oil and tallow on a group-wide basis, and is in talks with suppliers, like for instance, for jatropha in Thailand,' Mr Honkamaa said. Depending on the costs, over half of each plant's raw materials can be palm oil, with the rest tallow, although the biofuel refineries are completely flexible in their feedstock mix.
Neste is already in talks with big oil companies to take biodiesel from its Singapore and Rotterdam plants. 'We don't see a challenge in (securing) markets, the challenge is more in raw materials,' Mr Honkamaa said.
Speaking at the ceremony, Trade & Industry Minister Lim Hng Kiang said that Neste's project 'affirms Singapore's position as a trusted business destination', adding that 'the outlook of the energy and chemicals industries remains positive'. Underlying this, he said, are two main factors: the increasing emphasis on addressing environmental challenges and the Asian growth story, especially in China and India, and increasingly, Asean.
