Jurong Aromatics Corporation, Aromatics Plant, Jurong Island, Singapore

Jurong Island plays host to most of the largest petrochemical companies in the world. There are more than 80 companies represented on the island with facilities of one sort or another, which has required an investment of over $24bn.

With so many refineries on the island, processing over 1.3 million barrels of crude oil per day, it is hardly surprising that petrochemicals plants have also been sited there.

One of the latest facilities to be constructed will be the new Jurong Aromatics plant, owned by the private concern Jurong Aromatics Corporation (JAC). The plant was originally planned for start-up in 2011, but was delayed due to financial crisis but is now on-track with restructuring of the shareholders and improving market conditions. It is expected to be completed in 2014.

SK Energy is the major shareholder (30%) of the JAC. Originally, a stake of 60% was held by Jurong Energy. This stake was restructured in 2010. Other interested parties include Glencore (10%), Jiangsu Sanfanxiang Group (25%), Continental Chemical Group (20%), Thai KK Industry (10%) and Singapore's EDB Investments (5%).

The new plant is expected to cost $2bn to construct and has been designed to produce 1.5 million tons of aromatics (benzene, orthoxylene, paraxylene, toluene, ethylbenzene) per year, alongside 2.5 million tons of fuel per year. Land for the refinery was provided by JTC Corporation (the body in Singapore responsible for administration of land in industrial parks).

Heah Soon Poh, director for JTC Corporation's Specialised Parks Development Group, commented on announcement of the project: "The JAC project will synergise well with the Jurong Island petrochemical cluster. A key advantage to JAC's project is the use of the Jurong Rock Cavern (JRC) to help meet its storage requirement." The JRC will provide 1.48 million cubic metres of underground oil storage space.

Jurong aromatics plant construction

The petrochemicals engineering company UOP Technology (a subsidiary of Honeywell International, Inc) was selected as the main contractor for the project in October 2007. UOP will provide the technology, basic engineering services and equipment for the new plant.

JAC also awarded a lump sum turnkey contract to the construction company SK Engineering and Construction, the construction subsidiary of SK Group, for the construction of the plant and infrastructure. The basic engineering and design of the required units was completed but construction of the facility was delayed to 2014.

Ewe Ee Foong, director of JAC, commented on the award of the contract: "UOP has been working with us to develop this project from its conception, providing a complete solution that will help us to meet growing demand for fuel and petrochemical products in this region.

"We are confident this will be among the most competitive petrochemicals facilities in the world, using the most advanced technologies, and we consider UOP to be an important partner to help us make this happen."

In February 2009, JAC announced that the start-up of the aromatics project would be delayed until 2013, now further delayed until 2014. The decision was taken as the company was unable to find funding for the project. JAC is hoping to secure funding from the Singapore Government. The company has held talks with Singapore's Economic Development Board (EDB) to issue funds under its Capital Assistance Scheme.

In January 2010, BP and other shareholders came forward to help with the project financing. Following these developments, JAC announced that construction of the project would start in March 2010 and be completed by 2013.

Julian Ho, executive director for Energy, Chemicals & Engineering Services at Singapore's Economic Development Board (EDB), said: "We welcome JAC's interest in Singapore and are delighted that they have earmarked Jurong Island for their new manufacturing base.

"JAC's presence will certainly add to the vibrancy of the ecosystem of companies on Jurong Island, as well as allow for further opportunities for downstream integration. We look forward to the finalisation of the details of the project and the ground breaking in 2008."

The plans, however, were further delayed due to financial debt support for $1.5bn. In August 2010, JAC announced that the plant would receive debt from the Korea Trade Insurance Corp ($600m) and the Export-Import Bank of Korea ($330m initially with another $270m future guarantee) by December 2010. The financial adviser for the debt package of the plant is ING, while Royal Bank of Scotland and Dutch Bank are joint coordinators for the financing.

Feedstocks and products

JAC expects the plant to use natural gas condensate from gas fields in the region as feedstock for the plant, although with so many refineries in Jurong there are numerous alternatives.

The plant is expected to produce 800,000t of paraxylene, 200,000t of orthoxylene, 450,000t of benzene and 25 million tons of petroleum products annually. All of these chemicals will be supplied to manufacturers of textiles and polymers in the Far East.

The facility will incorporate UOP technologies to produce low-sulphur, environmentally cleaner fuels and aromatics. Technologies will include the UOP Merox process and the UOP Distillate Unionfining processes to remove sulphur and also to upgrade distillate materials to produce clean fuels.

The facility will also feature the UOP CCR Platforming process, UOP Parex process, UOP Isomar process, UOP Tatoray process and the UOP Sulfolane process. These are all for the production of aromatics.

Further developments

At the end of 2007, Sembawang Engineers and Constructors, a wholly owned subsidiary of India's Punj Lloyd's, was awarded a major turnkey contract on Jurong Aromatics Corporation’s world scale aromatics project. The contract was valued at $450m.

Under the terms of the contract Sembawang E&C will be responsible for providing engineering, procurement and construction work on all ancillary facilities, including the intermediary and finished product storage facilities, the receiving and exporting jetties, power and steam co-generation plant, wastewater treatment unit as well as other utilities and infrastructure.

During the first half of 2008, Jurong Aromatics Corporation (JAC) signed a contract with BP in which the oil major will supply a large proportion of the feedstock required by JAC's new production facilities. The contract is valued at $10bn and the companies have an option to renew the contract upon maturity.

In addition, JAC will supply refined products for consumption within BP's own plants and at key companies around the world.

In August 2010, JAC awarded a $950m contract for the construction of the aromatics plant to SK Engineering & Construction. Sembcorp Industries will provide utility services including water and wastewater treatment for 20 years.