Jurong Aromatics complex to start building in March
Its US$1.56b finance package will be inked in mid-Feb
Ronnie Lim Business Times 31 Jan 11;
THE coming two months will see a couple of earlier-planned multi-billion dollar investments on Jurong Island finally fall into place.
Jurong Aromatics Corporation (JAC) is set to start construction of its US$2.4 billion aromatics complex in March, sources said, once its US$1.56 billion financing package is signed by the middle of February.
And Sembcorp - which has been contracted by JAC to supply it with steam, water and wastewater treatment services - is also set to sign off on a $900 million EPC deal with Alstom to expand its cogeneration capacity by some 800-megawatts this quarter, BT understands. This will double its cogen capacity to 1,615 MW, giving it economies of scale to better compete.
A source said that JAC has scheduled a debt package signing after the coming Lunar New Year holidays with 'some 11 banks, plus two Korean governmental groups' - with the latter being the Export-Import Bank of Korea and Korea Trade Insurance Corp.
This follows a roadshow last November which saw the JAC financing deal, jointly led by ING Bank and Royal Bank of Scotland, being fully subscribed to by apparently mainly European banks.
'Construction of the JAC complex will now start in March, with completion expected in 36 months,' the source added.
This means that the world-scale project - which will produce 1.5 million tonnes per annum of aromatics and 2.5 million tpa of transport fuels - will now come on-stream in early-2014. This is some three years later than it had earlier planned, as the project ran smack into the global credit crunch in 2009.
Sembcorp - which earlier indicated it would not build new capacity pending securing customers - now has the justification, with the JAC project steaming ahead, and Germany's Lanxess already building its synthetic rubber plant.
But as the genco's utilities deals with JAC and Lanxess are mainly for steam and wastewater treatment, Sembcorp will approach its expansion judiciously, and carry it out in two phases. 'The first 400 MW is expected to come on-stream end-2013, with the second coming later,' a source said, explaining that 'a 800MW expansion all at once will be too lumpy, especially given the many other power plants coming on at the same time'.
The 800MW cogen expansion is an addition to Sembcorp's announcement last August to build a $800 million multi-utilities complex next to an earlier-planned $40 million wastewater treatment plant at the island's Tembusu sector. The project, on a 5.3-hectare site, included initially a cogen plant producing 400MW of power and 200 tonnes per hour of steam.
The additional 400MW to be added will put Sembcorp on a stronger footing to compete with new power/utility plants coming up there.
China Huaneng-owned Tuas Power is currently building a $2 billion clean coal/biomass multi-utilities complex on Jurong Island to supply steam and cooling water to Lanxess, while on the mainland, it is also expanding its capacity to supply utilities to new investors like Renewable Energy Corporation and Neste Oil.
YTL-owned PowerSeraya has also entered the utilities game, having recently completed building 800 MW of new cogen capacity, while KepCorp is boosting its current 500MW of capacity in Tembusu to 1,300 MW. New player GMR is also building its new 800MW Island Power station there.
Defunct biodiesel plants get new lease of life
New owners recycle plants on Jurong Island to make other products, like chemicals
Ronnie Lim Business Times 31 Jan 11;
(SINGAPORE) A new wave of 'recycling' is taking place on Jurong Island.
Defunct first-generation (1-G) biodiesel plants - which became uneconomical when palm oil prices soared - are being revived as new owners upgrade them to make other products like chemicals used for oil and gas drilling.
The 'rejuvenation' of Northfield-based Stepan Company is the first of these. After acquiring Peter Cremer's 100,000 tonnes per annum (tpa) methyl ester plant in July last year, the American chemicals company is currently upgrading it and installing another fractionation column at the Singapore plant to potentially double its capacity to 200,000 tpa.
The plant's upgrading and expansion, scheduled for completion in February next year, will enable Stepan to produce surfactants used in oilfields. Stepan's surfactants are used in three major oilfield market segments, including drilling, production and stimulation. Methyl esters are for instance used as solvents in drilling fluids.
Another Jurong Island 1-G biodiesel plant which looks set to go the same route is the $130 million Jurong Island plant (once touted as the world's largest biodiesel facility) of Australian-owned Natural Fuel Pte Ltd. The plant which folded up in late-2009 is understood to have changed hands recently. But no details are available at this time.
President and CEO of Stepan, F Quinn Stepan Jr said at the time of its acquisition of Peter Cremer that: 'Methyl esters are a core building block of Stepan's surfactant business and the acquisition of this asset on Singapore's Jurong Island provides a great opportunity to reach our global customer base with methyl esters (ME) and value added derivatives.'
'Our plan is to install methyl ester fractionation capability on the site in order to supply our customers and our internal surfactant needs globally with fractionated methyl esters and derivatives made from tropical oils available in the region.'
The financial terms of the acquisition of the US$20 million plant - previously a joint venture involving Germany's Peter Kremer and Malaysia's Kulim Berhad - were not disclosed.
Stepan just over a week ago awarded a $14.6 million contract to Rotary Engineering to build a new four-storey 50,000 tpa (expandable to 100,000 tpa) fractionated ME plant and also upgrade the existing plant. The plant is expected to tap raw materials like palm oil and coconut from this region.
The early 1-G plants here like Natural Fuel and Peter Cremer, and a third plant belonging to Continental BioEnergy, essentially fell victim to soaring palm oil prices. Palm oil prices had tripled to US$1,400- plus a tonne by March 2008 from US$450 a tonne around 2005/06 when the Jurong Island plants first started.
Given also stiff competition from the many rival biodiesel plants in neighbouring palm oil producing countries, Malaysia and Indonesia, Singapore has been promoting more advanced 2-G plants, or second generation plants, with biofuels developed from non-edible or discarded plant parts.
Finland's Neste Oil which expects to ramp up its just-started $1.2 billion biodiesel plant at Tuas to full production by mid-year, exemplifies such 2-G technology.
Its 800,000 tpa Singapore plant - the largest in the world, with an identical new twin plant in Rotterdam starting up also around mid-year - produces biodiesel from 100 per cent renewable materials like palm oil and animal fat. Its advanced 2-G refineries allow Neste Oil to produce biodiesel from straight processing of the raw materials.
The Economic Development Board, in a background note to a recent tender for a consultant, said: 'EDB believes bio-based feedstocks could add a new dimension of chemical feedstock option on Jurong Island. The fast-growing bio-based chemicals industry would also create new economic opportunities for Singapore.'
