Singapore sounds out oil firms on ultra-low sulphur petrol, diesel

Early-stage talks on introducing greener grades of Euro IV petrol, Euro V diesel
Ronnie Lim Business Times 14 Sep 10;

WITH the world moving to 'greener' transport fuels, Singapore is starting to suss out the oil companies and refiners on the potential for them to introduce even cleaner, ultra-low sulphur petrol and diesel grades here, industry sources said.

'The authorities made the approaches recently, and the oil companies are debating whether they can do it,' one oil official told BT, noting that some broad timelines - but not specific deadlines - were broached in these 'early-stage' talks.

BT understands from industry sources that the National Environment Agency (NEA) sounded out the possibility of them introducing the greener fuel grades of Euro IV specification petrol, which has a maximum sulphur content of 50 parts per million (ppm), tentatively by end-2012, and Euro V specification diesel (with maximum sulphur content of 10 parts per million) by end-2014.

But at the same time, the NEA is also conscious that the tighter emission standards must not come at a high cost, and be cost-effective.

A recent Platts report on NEA's meetings with the oil industry, cited NEA as saying: 'We are still consulting the oil industry on the lead time needed to supply higher-quality gasoline. No time frame has been set at this moment on the adoption of a higher emission standard or the Euro IV emission standard for petrol vehicles.'

Currently, petrol sold here meets Euro II specifications, where the maximum allowable sulphur content is 500 ppm, although higher octane grades sold here, like 98 RON, is said to already have a lower sulphur content of less than 100 ppm.

'For diesel vehicles, we have, in the Singapore Sustainable Development Blueprint which was launched in April 2009, indicated that we are targeting to move to Euro V vehicle emissions standards by 2014/15,' the report quoted an NEA spokesman as saying.

Singapore last legislated the use of Euro IV diesel here in October, 2006 - up from the previous Euro II diesel specifications.

From the refiners' viewpoint, production of the cleaner, or ultra-low sulphur, transportation fuels will require costly new plant investments.

Singapore Refining Company (SRC) is, for instance, currently carrying out front-end engineering design for a planned US$300-400 million project (including a cogeneration plant for the refinery) to produce ultra-low sulphur gasoline.

This will apparently be capable of producing Euro IV specification petrol.

The final investment decision for the project is expected from SRC - a joint venture between PetroChina and Chevron - this year-end.

ExxonMobil, Singapore's largest refiner, which last month told BT that it was 'evaluating additional investments in the Asia-Pacific, including a potential diesel project at its Singapore refinery,' is also understood to be looking to produce Euro V specification diesel.

One industry observer said that the tentative end-2012 timeline mooted for Euro IV petrol here 'is quite pressing' given that plants take time to build.

'From the time a go-ahead is given, it can take at least one and a half years or more, depending on the project's complexity.'