Need to cut emissions and yet protect interests: PM

Straits Times 5 May 10;

THE completion of Shell's multibillion-dollar petrochemicals complex yesterday shone the spotlight on Singapore's large and economically important energy and chemical industry.

With output topping almost $60 billion a year, the industry accounts for about a third of total manufacturing production in Singapore, Prime Minister Lee Hsien Loong said yesterday.

But the sector produces a significant amount of environmentally damaging carbon dioxide, he added.

Therefore, PM Lee said, Singapore was closely tracking the United Nations Framework Convention on Climate Change talks, and how an international agreement to limit greenhouse gas emissions would impact Singapore.

'There is no such agreement yet, it is still being discussed, but it's something which is necessary for the world, which will come about at some stage and which Singapore supports,' he said in his speech at a dinner to celebrate the completion of the Shell complex.

'And yet within this support... in this broader context, we have to protect our interests and ensure that our economy can function and stay viable.'

He added: 'We will strive to safeguard our interests at the talks, together with other countries which share these interests. And we will also work with the chemicals industry to improve emissions standards, to help it remain competitive and viable in Singapore.'

FIONA CHAN

PM Lee opens Shell's ethylene cracker complex
Desmond Wong Channel NewsAsia 4 May 10;

SINGAPORE: Jurong Island is now home to Shell's largest petrochemical complex in Asia.

Speaking at the launch event on Tuesday, Singapore Prime Minister Lee Hsien Loong said the facility could help to attract some S$2 billion in fixed asset investments from leading chemical firms.

The multi-billion dollar Shell Eastern Petrochemicals Complex will enable the energy giant to up production level to better serve the Asian market.

Mr Lee said the new complex is a key project that will bring a new source of feedstock to Jurong Island and that will help to spur a new wave of high-value downstream investments in the chemical industry.

Singapore, on its part will continue to support the sector's growth.

The energy and chemical industry accounts for a-third of Singapore total manufacturing output at S$60 billion annually.

But Mr Lee notes that managing the carbon emissions from such projects is key.

He said: "The government is tracking closely the UN framework convention on climate change talk, and how an international agreement to limit greenhouse gas emission would impact Singapore.

“We will strive to safeguard our interests at the talks together with other countries who share these interests. And we will also work with the chemical industry to improve emission standards to help it remains competitive and viable in Singapore." - CNA/vm

Shell opens $4b chemical complex
Project is expected to attract new wave of high-value investment
Fiona Chan, Strait Times 5 May 10;

ENERGY giant Royal Dutch Shell yesterday opened its highly anticipated multi-billion-dollar petrochemical complex in Singapore, producing chemicals used in almost every consumer product from clothes to cars.

The Shell Eastern Petrochemicals Complex - a sprawling network of plants on Pulau Bukom and Jurong Island connected by sub-sea pipelines - took four years, more than 15,000 workers and enough steel to construct three Eiffel Towers.

With an estimated cost of US$3 billion (S$4.1 billion), the project is Shell's lar-gest-ever petrochemical investment and will give a huge lift to the vital chemical industry in Singapore, which accounts for a third of total manufacturing output here.

Already, Shell's decision to expand its petrochemical operations in Singapore has prompted other chemical companies to locate their plants here as well, said Shell chief executive Peter Voser, who was in town yesterday for the opening.

Prime Minister Lee Hsien Loong, who was guest of honour at the opening, said Shell's new complex is expected to 'catalyse a new wave of high-value' investments in the chemical industry and generate investments of more than $2 billion from leading chemical companies.

This is because the new complex will bring a new source of feedstock - or raw materials - to Jurong Island, he said.

PM Lee, who had attended the complex's groundbreaking ceremony in 2006, thanked Shell for its 'commitment and confidence' in Singapore and noted that the project was completed on time despite last year's global recession.

He also said Singapore is committed to supporting the growth of the energy and chemical industry. Jurong Island, which is shaping up as the Republic's global chemical hub, is the target of a new 'Jurong Island version 2.0' initiative to develop technology solutions that save resources such as energy, carbon, water and land.

The initiative involves schemes to use waste heat to power production processes and to convert waste carbon dioxide into useful products, creating more value and reducing the carbon footprint, Mr Lee said.

In his speech, he also highlighted the longstanding relationship between Shell and Singapore. Shell's first refinery here, set up in the early 1960s, helped to launch the energy and chemical industry. Today, Singapore has become Shell's largest petrochemical production and export centre in Asia.

It is also Shell's regional headquarters for both upstream activities, such as exploration and production, as well as downstream ones, including refining and petrochemicals, Mr Lee said.

Shell has also set up its global headquarters here for its marine products business unit.

Given this connection, it was a 'natural choice' for Shell to site its mega petrochemical complex here, Mr Voser said at a press conference yesterday. He added that the new complex is part of Shell's plans to 'ride the wave of Asia's growth, and to meet its rising demand for energy and related products'.

Energy demand in South-east Asia will almost double by 2030, and the number of vehicles on the roads in this part of the world could triple to 92 million, he said.

'The demand for petrochemicals in Asia is also soaring,' added Mr Voser. 'Just look around you - the paint on the walls and the carpets under our feet, to the clothes that we wear, the bottles for the water you drink, your computers and mobile phones - all of these require input from today's petrochemicals industries.'

What distinguishes Shell's new petrochemical complex is its proximity to Shell's existing refinery on Pulau Bukom, which has been integrated into the complex to make it the group's largest fully integrated refinery and petrochemical hub in the world.

The refinery has been modified so it can produce a variety of raw materials to feed directly into the petrochemical complex. The complex will employ up to 200 permanent workers, according to reports.

The centrepiece of the new complex is a world-scale ethylene cracker in Pulau Bukom which started up in March. The complex also includes one of the world's largest monoethylene glycol plants, in operation since November, which can produce enough output to make one polyester shirt for every person on the planet.

Shell's world-scale project at advanced stage of planning
Plant may draw such downstream players as detergent makers
Ronnie Lim, Business Times 5 May 10;

(SINGAPORE) Shell is at 'an advanced stage of planning' for a world-scale, high-purity ethylene oxide (HPEO) plant on Jurong Island - which is drawing in downstream players such as detergent makers to a 'new high purity chemicals corridor' the Economic Development Board has been hoping to develop there.

Disclosing this yesterday, Iain Lo, Shell Chemicals' vice-president (new business development & ventures), said that the oil giant will make a final investment decision by this year-end or early next year on the investment, which will attract more value-added petrochemical processes to Singapore.

Mr Lo, who said this in an interview on the sidelines of the inauguration of Shell's new US$3 billion petrochemical complex, however, declined to say how much the HPEO plant - which is the most advanced of its planned new projects for Singapore - will cost.

'It's world-scale,' he only ventured, when asked if it will run into hundreds of millions of dollars.

The HPEO investment is the next logical project here for Shell, he said, as the plant will use raw materials from the 750,000 tonnes per annum mono-ethylene glycol (MEG) downstream plant of its just-started Shell Eastern Petrochemicals Complex.

'Additionally, there is also interest by customers in the HPEO,' Mr Lo said, adding that they will need to set up plants 'within pipeline distance from the MEG plant on Jurong Island'.

Shell Chemicals' executive vice-president Ben van Beurden told BT last December that 'there is a very clear market for HPEO - which through ethoxylation, ie putting EO on alcohols - is used for products like detergents or soaps. This is an important region for doing this, because the alcohols come from palm- grown oil, so a lot of players are looking for HPEO and facilities to do that'.

Shell's new SEPC complex currently comprises a 800,000 tpa ethylene cracker on Pulau Bukom, plus the MEG plant on Jurong Island and another butadiene extraction unit.

Asked if there was further room for expansion on Bukom, where the cracker is integrated with its 500,000 barrels per day refinery, Mr Lo revealed that further debottlenecking of the SEPC cracker to increase its capacity is also another option being studied.

While he declined to disclose numbers, this is likely to be on the scale of previous projects here, like ExxonMobil increasing the capacity of its first cracker by 100,000 tpa to 900,000 tpa.

The cracker expansion will hinge on 'Shell's future view of the market', said Mr Lo.

Currently, despite competition from the many new start-ups including in China and the region, 'we are still cautiously optimistic about the economic recovery in Asia underpinning the economics of the SEPC project,' he stressed.

'The issue is whether the recovery we are seeing, which is largely driven by China, will continue... or will the Chinese government do something to cool the overheated economy?'

Still, for the next two years or more, 'SEPC is sold out' Mr Lo said, with 'a significant amount of MEG going to China and North Asia', and other products going to existing affiliates like Petrochemical Corporation of Singapore and other downstream companies.

Longer-term, Shell still wants to sell the cracker's products to Singapore-based customers, and it continues to engage potential downstream investors on this, he added.

Another project which Shell is interested in here is a terminal to import liquefied petroleum gas, which is an alternative feedstock to naphtha, and which will help enhance the competitiveness of petrochemicals plants here, said Mr Lo. 'LPG is especially attractive in summer months, and less so in winter, as it is used for heating purposes.'

'The project is progressing reasonably well,' he said of the plan to import the LPG from Qatar, although there's competition (including from an existing oil terminal operator) to build it.

'This suggests there's sufficient demand to support the project.' Things will hopefully be clearer on the LPG terminal project by year-end, he added.