Shell seeks to expand plant on Bukom

Energy giant growing its presence in Asia as demand shifts to the East
Alvin Foo Straits Times 3 Oct 12;

ENERGY giant Royal Dutch Shell is looking at expanding the capacity of its ethylene cracker complex on Pulau Bukom by about 20 per cent, said a member of its executive committee.

The move comes as it is growing its presence in Asia as energy demand shifts from West to East.

Shell downstream director Mark Williams told The Straits Times recently: "We're studying the possibility of expanding, taking... the cracker from 800,000 tonnes per annum to a million. So that's roughly a 20 per cent expansion."

However, he added that a final investment decision had not yet been made.

The world-class ethylene cracker, which started up in March 2010, is the centrepiece of its US$3 billion (S$3.7 billion) Shell Eastern Petrochemicals Complex.

Mr Williams oversees Shell's downstream business, which includes refining, supply distribution, trading and marketing.

He is a member of Shell's executive committee, which operates under chief executive Peter Voser's direction and is responsible for the company's overall business and affairs.

Mr Williams predicts that the trend of volatile energy prices will continue in the coming years, as the pace of change of supply is quite slow relative to the speed at which demand grows or contracts.

He said: "This year, we've seen oil prices go from US$80 to US$120 in a few months. We expect that trend (of volatility) to continue."

Asia is expected to drive energy demand growth globally, owing to the region's population and economic expansion, said Mr Williams.

One can "easily" expect a doubling of energy consumption in Asia in the next 30 years, he said.

He added: "We see Asia as really leading in terms of the pace of energy demand growth globally. The developing economies, many of which are in Asia, are the engines of growth of energy demand globally. We clearly expect that trend to continue."

Asia is playing an increasingly significant role for Shell.

In August, it announced plans to build its seventh lubricants- blending plant in China. The Tianjin plant will have an initial capacity of 300 million litres a year, and will supply the northern China market.

Mr Williams said its trading in Asia for fuels and liquefied natural gas (LNG) is also growing.

He said: "We're trying to supply the market as aggressively as we can.

"The East is really the key to anchoring the demand that supports a lot of the prospects we have in other parts of the world."

The move to the East also means Shell has more staff headquartered in Singapore and China.

Mr Williams said: "The shifting of the business focus means we have to shift the centre of gravity of our staffing. We're working very hard to develop Asian talent in the company, and Singapore's a critical component of that.

"As we shift East, we want to participate as much as we can with local people."

Shell recently moved a number of senior positions to Asia for its fuels, lubricants and LNG businesses, said Mr Williams.

He added: "This is not a mass invasion, but bit by bit, we are growing our presence in the market."