Realising Jurong Island's potential

Business Times 1 Dec 09;

Completed 21 years in advance, the island has become a magnet for petrochemical investments

FROM seven idyllic islands to one big bustling petrochemical centre, the formation of Jurong Island in the last 14 years has been nothing short of extraordinary. Even more striking is how reclamation works on the island recently ended - 21 years ahead of schedule.

'We had defied great odds to complete this reclamation ahead of time,' said JTC Corporation chairman Cedric Foo at Jurong Island's reclamation completion ceremony in September.

Jurong Island is the answer to a vision that came about as early as in the 1960s. Back then, Singapore was among the top three oil refining centres in the world, but it was looking for a 'quantum leap' to maintain its edge in the petrochemical industry.

'Regional countries were also planning to set up refineries for their own domestic market,' Minister for Trade and Industry Lim Hng Kiang recounted at the reclamation completion ceremony. 'We realised that we needed a quantum leap to stay ahead of the competition.'

What Singapore needed was to build up and integrate the petroleum industry with the petrochemical industry. But there was insufficient industrial land on the mainland to house more chemical companies. 'This gave rise to the bold idea to reclaim and join seven southern islands into what we know today as Jurong Island,' Mr Lim said.

Three oil giants were already operating on three of the islands - Esso on Pulau Ayer Chawan, Singapore Refining Company on Pulau Merlimau and Mobil Oil on Pulau Pesek.

The other four islands - Pulau Ayer Merbau, Pulau Pesek Kecil, Pulau Sakra and Pulau Seraya - also became important pieces of the vision.

In 1991, JTC became the agent for developing Jurong Island. Working closely with various government agencies, it delivered the necessary infrastructure and services such as roads, drains and utilities.

Reclamation works began in 1995 and a fair number of challenges cropped up as Jurong Island took shape.

For instance, in 2005, the authorities had to divert and realign a stretch of the Jurong Island Highway - together with 17 pipelines and 4 core fibre-optic cables - to meet ExxonMobil's needs for a contiguous plot of land next to their current cracker.

'This was a mammoth undertaking,' Mr Lim said. 'JTC worked closely with the affected companies and agencies to devise innovative solutions to minimise disruption to business operations on the island.'

Alternative ways

Disruptions to the import of sea sand also posed a risk to progress. But 'we opened up alternative sources of sand supply and explored other ways to meet our needs', Mr Lim said.

The aim was to complete reclamation works in 2030. But as demand for land on Jurong Island surged, JTC brought the third and fourth phases of the project forward and completed the reclamation well ahead of schedule.

Jurong Island is today the cornerstone of Singapore's energy and chemical industry. It spans 3,000 hectares - a giant compared with the seven islands which occupied a total land mass of just 991 ha.

Not only has Jurong Island grown in size, it has also grown in economic clout. In 2000, 61 petrochemical companies invested $21 billion on the island. Today, there are 95 firms pouring in over $31 billion into fixed assets.

The recession had at one point forced some companies to postpone projects on Jurong Island. But with the economy picking up, some plans are back on track.

For instance, China Huaneng - the new owner of Tuas Power - will go ahead to build a $2 billion clean coal and biomass cogeneration plant on Jurong Island. Reports also note that Jurong Aromatics Corporation could resume its US$2 billion petrochemical investment.

Because of strong investor interest, Jurong Island is running out of space. Some 75 per cent of the 3,000 hectares of land has been taken up or reserved by oil and petrochemical investors, JTC told BT recently. 'JTC is in discussions with companies for the remaining 25 per cent,' the agency's spokeswoman said. In his speech at the reclamation completion ceremony, JTC's Mr Foo said that the agency will continue to improve infrastructure on Jurong Island to anchor more investments.

One new facility Jurong Island will be getting is a barging terminal. This will give chemical companies an alternative transport option to trucking - there are only a few roads which trucks carrying hazardous materials can use to get to the island currently. The terminal will be built on the western part of the island and the first phase of the project will be ready by 2011.

New roads

There could also be a new road link to Jurong Island. JTC has completed a preliminary study on building another road from the mainland, which would cater to the growing working population. Some 38,000 people pass through the island's checkpoint daily. JTC still needs to iron out details such as the position and cost of the second link, which could be ready by 2017.

To boost security on Jurong Island, JTC will also introduce a biometric access system at the checkpoint. The system should be completed by 2011.

'We will continue to find ways to adjust the Jurong Island profile to bring about stronger integration for greater operating efficiencies by the companies, and in particular to include new entrants,' said Minister Lim.

'Our vision is for Jurong Island to be a global energy and chemical hub. We intend to achieve a critical mass of feedstock, move to higher value chemical chains which produce speciality chemicals and advanced materials, and partner companies in developing new chemical products.'

A series of articles sponsored by JTC.