Jurong Island: Singapore’s Petrochemical Hub
Singapore has grown to become one of Asia’s, and one of the world’s leading and most cost effective locations for producing petrochemicals. At the heart of this success is Jurong Island, which started out as a collection of small islands and is now home to three major oil companies. Muriel Axford reports.
In an ambitious land reclamation project that was officially completed in 2009, Singapore has connected seven of its islands to form Jurong Island. The island has a land mass of some 3,000ha and, according to Singapore’s Economic Development Board (EDB), hosts more than 95 companies from the US, Europe and Asia.
The list includes heavyweights such as DuPont, Huntsman, BASF, Perstorp, Dainippon Ink & Chemicals, and Sumitomo Chemical. The EDB adds that Jurong Island has drawn cumulative fixed asset investments in excess of S$30bn and, in 2009, employed 8,000 people.
Speaking at the official completion of the Jurong Island Land reclamation project, Singapore Minister for Trade and Industry Lim Hng Kiang explained the vision that spurred on the project: "During the 1960s three oil majors were operating on three different islands. Back then we were among the top three refining centres in the world.
"However, regional countries were also planning to set up refineries for their own domestic market. We realised that we needed a quantum leap to stay ahead of the competition. Our vision was to use our leading position in refining to build up and integrate the petroleum industry with the petrochemical industry. To achieve this we were confronted with a huge challenge: how to find sufficient land to house the sector."
The fact that Jurong Island was built from scratch has meant that investor’s requirements have been catered for. From basic infrastructure, services and access to feedstocks as well as a highly educated workforce, Singapore offers investors what it calls ‘plug and play’, emphasising the ease with which major projects can be developed and become operational. Along with what Jurong Island has to offer, Singapore also claims that its central location means companies are only a short flight away from the major Asian business centres.
Having achieved the vision to reclaim and land and maintain Singapore as a leading global refining and chemical hub, there is now an increased focus to adjust Jurong’s profile to bring about stronger integration for greater operating efficiencies by the companies and to include new entrants. "Our vision is for Jurong Island to be a global energy and chemical hub. We intend to achieve 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," says Kiang.
The major player in helping meet these goals is Singapore’s R&D centre, the Institute of Chemical and Engineering Science (ICES), established in 2002. The ICES has collaborated with a number of companies including Japan’s Mitsui Chemicals, a venture that was so successful that Mitsui went on to set up an R&D centre in Singapore, its first outside Japan.
Indeed, Singapore could see an increasing number of companies doing the same following the recent budget statement that stated businesses incurring costs in Singapore on R&D would qualify for a tax deduction or tax allowance of 250% for the first S$300,000 of the qualifying expenditure incurred for each year of assessment. Singapore Finance Minister Tharman Shanmugaratnam believes this, among other incentives, will grow Singapore’s productivity, support the growth of more globally competitive Singaporean companies and help raise the real income of its citizens.
Development of a skilled workforce is central to Singapore’s continued development of Jurong Island, so in 2004 the Chemical Process Technology Centre (CPTC) was opened. The aim of the CPTC is to train new entrants and enhance the capabilities of existing professionals working in the sector.
The CPTC is owned by the Singapore EDB and managed by Petrofac Training. Said to be the first training centre in the world to house an industrial-scale petrochemical process plant, CPTC allows trainees to experience ‘live’ plant conditions in a safe and controlled environment.
Even with a skilled workforce and all the available training, companies concede that with so many options it is difficult to attract even trained chemical engineers into the petrochemical sector.
Dr A Chockalingam, chairman of the Singapore Chemical Industry Council, comments: "In this knowledge-based and technology based economy of ours, one growing concern has been the transfer of knowledge. We know that there is a growing pool of experienced hands that are fast approaching retirement age. It would be a waste to lose them purely because of their age. I would encourage industry members to consider the possibilities of retaining these experts and to continue tapping their knowledge, especially in training up the next generation of practitioners who can bring our industry to the next level of growth and performance."
While proud of its achievements, Singapore is well aware of the challenges ahead. The first month of 2009 saw the island state’s manufacturing output decrease by 29.1% compared with January 2008. Output in the chemicals sector declined 24% in January 2009. But, along with the global economy, and in particular some positive economic signs in China, Singapore anticipates a slow, but steady path to recovery.
From strength to strength
In December 2009 Shell officially opened its 750 000tpa mono ethylene glycol plant on Jurong Island. Said to be one of the world’s largest MEG facilities, the plant is a key component of the Shell Eastern Petrochemical Complex (SEPC). The SEPC, which has been established over a number of years, is due to be fully completed during 2010. Once fully operational, Shell says that the complex will be its largest, fully integrated refinery and petrochemical hub. Shell has been active in Singapore since 1891.
Exxon Mobil is the process of building a second world-scale cracker and associated derivative units in Singapore. The 1,000,000tpa ethylene steam cracker is due to become operational in early 2011; ground breaking took place during 2007. The project will use ExxonMobil’s proprietary technologies. The company currently has a production site on Jurong Island, known as the Singapore Chemical Plant, which became operational in 2001. The facility produces 900,000tpa of ethylene along with associated derivatives.
The start of 2010 saw Lanxess, a company specialising in the development, manufacturing, and marketing of plastics, rubber, intermediates and speciality chemicals, announce plans to build a butyl rubber facility in Singapore. The 100,000tpa plant is expected to start up in the first quarter of 2013. Investment costs are put at $575m. Lanxess said that the plant will serve the rising demand for tyres brought on by increasing use of cars, particularly in India and China.