Thursday, September 8, 2011

Synthetic rubber plant opens in Jurong Island

 Japan's Zeon Corporation opened its first synthetic rubber plant in Singapore, which will meet the rising demand in Asia for environmentally-friendly and fuel-efficient tires.

The solution polymerized styrene-butadiene rubber plant is located at Jurong Island, according to Reuters.

"The investment will take Zeon one step nearer to our goal of more than tripling our SSBR sales to US$422 million ($508 million) annually by 2020," said Naozumi Furukawa, Zeon's president and chief executive, in a statement.

The Jurong plant will commence production in two phases – in mid-July 2013 with a capacity of 30,000 to 40,000 metric tonnes a year, and in the first half of 2016 with capacity of another 30,000 to 40,000 metric tonnes a year, Zeon said.

Friday, August 19, 2011

Corporate: Coming of age


Sembcorp Industries is doubling its utilities capacity over the next five years, but its offshore and marine business still casts a long shadow over the group. Would spinning off SembMarine help it achieve its true worth?

Tang Kin Fei sidesteps the throng of analysts that swiftly surrounds his chief financial officer, Koh Chiap Khiong, during Sembcorp Industriesâ 1H2011 results briefing recently, moving instead to greet fund managers and members of the media eager to congratulate him for delivering an impressive set of results for the period.

Although revenue for the six months to June 30, 2011 fell 8% to $4.2 billion from a year ago, Sembcorp managed to report a 5% rise in earnings to $335 million, thanks to improved performance by the utilities division. â We have made good progress in the development of our major utilities growth projects, especially in Singapore but also in China and the Middle East,â Tang, group president and CEO, says of the typically staid division at the briefing.

Sembcorpâ s utilities business registered a 17% y-o-y rise in 1H2011 earnings to $137.4 million â " representing about 40% of the companyâ s total bottom line â " on the back of a 22% increase to $2.4 billion in revenues, owing to higher electricity prices from its growing energy operations in Singapore. It also received a boost to earnings from the successful integration of US water company Cascal NV, acquired by Sembcorp in July last year to extend its capabilities in municipal water production and venture into markets such as Chile, South Africa and Panama.

Yet, Tang believes shares of his company are not trading at the valuations they deserve. â Our value proposition lies in our ability to develop and complete greenfield power plants on time and over a [relatively] short period of 16 years to generate a steady stream of growing income over the years, which is not easy in this industry,â Tang tells The Edge Singapore after the briefing. Reaching into his pocket for his iPhone, Tang accesses an application that allows him to monitor share price information of Sembcorp and points out that his company now trades below 10 times its current earnings, â which is undervalued for this industryâ .

One reason for this could be that Sembcorpâ s earnings are still more than 50%-dominated by its 60.7%-owned subsidiary Sembcorp Marine, one of the worldâ s largest rig builders and shipyard operators. With the boom in the offshore energy sector, SembMarine has seen orders for rigs and other offshore vessels soar in recent years, boosting its revenue and earnings. The result is that Sembcorp has come to be viewed as just an indirect play on SembMarine.

In fact, Sembcorpâ s share price trajectory has mostly mirrored that of its offshore and marine unit over the past few years. Indeed, after hitting 52-week highs of $5.84 and $5.80 on April 28 respectively, both SembMarine and Sembcorp have since fallen about 26% each. Yet, because it is viewed as a less direct play on the booming offshore sector, shares in Sembcorp are not as highly valued as SembMarineâ s. At current levels, SembMarine trades at 10.3 times earnings versus nine times for Sembcorp.

Now, the outlook for SembMarineâ s earnings over the next three years appears to be plateauing. Thatâ s partly because of greater uncertainty in the offshore market, given that, recently, rig orders have not been backed by charters, Kay Lim of DnB NOR points out in an Aug 3 report. In addition, yard slots have been tightening, suggesting that there is limited capacity for growth even if orders do continue to roll in.

Indeed, SembMarineâ s earnings for the six months to June 30, 2011 fell short of analystsâ estimates, owing to a delay in revenue recognition on a semi-submersible rig, the Songa Eclipse. As a result, several analysts have downgraded their earnings forecasts for both SembMarine and Sembcorp.

Will the emerging value of Sembcorpâ s utilities business now be further obscured by flagging earnings at its shipyard unit? Or, will it finally enable Sembcorp to emerge from the shadow of SembMarine? Would a split-up between the two companies help Sembcorp achieve its true worth in the market?

Leaning on SembMarine

CEO Tang agrees that Sembcorp might receive higher valuations as a standalone utilities provider. Yet, for now, it is still better off with Semb­Marine in its fold as it continues to build up its utilities business. â Without SembMarine, which is 45 years old compared with our 16 years, we would not be where we are today,â says Tang. â The utilities business takes a long time to generate income, while marine is more cyclical and can generate the cash we need to fund our growth and pay dividends at the same time.â

Sembcorp will need to continue to lean on SembMarineâ s financial heft to achieve its target of competing on a global scale. The company has a market capitalisation of $7.3 billion, which is â nothing compared to the US$50 billion utilities companies out thereâ , Tang adds.

â Without scale, we will not be able to weather bigger storms. We need to look beyond getting a higher valuation today, as our strategy is to grow the utilities income steadily so that, in five to 10 years, we will have two strong legs â " marine and utilities â " to stand on,â he says.

Indeed, the upbeat performance of 1H2011 heralds the beginning of many more profitable quarters ahead for Sembcorp as its investments in the sector push past their initial gestation periods and begin to generate cash. New facilities typically take three to seven years before debts are pared down and economies of scale are reached. By ramping up production at existing facilities and through some $4 billion in acquisitions lined up over the next five years, Tang aims to double Sembcorpâ s power and water generation capacities to 10,000mw annually and 10 million cu m a day, respectively, to establish itself as a global utilities provider.

Sembcorp owns and operates businesses involved in power generation, electricity retail, process steam production, and distribution and natural gas supply and retail, including compressed natural gas facilities both locally as well as overseas in the UK, China, Vietnam and the Middle East. It is in the process of constructing a second cogeneration plant on Jurong Island, where it already operates a similar plant â " Singaporeâ s first. It recently announced the construction of a $40 million industrial wastewater treatment plant on the island, which is expected to commence operations in 2H2012 and serve industrial customers such as German rubber company Lanxess and Jurong Aromatics Corp.

In addition, Sembcorp will be raising its supply of natural gas to Singapore by 26% to 90 billion British thermal units, following an expected increase in the flow of gas to Singapore in 4Q2011, which will contribute to profits. The company imports natural gas into the country from West Natuna, Indonesia and is the first commercial importer and retailer of natural gas in Singapore. It has already secured $466 million in new contracts for the supply of gas and other services.

Sembcorp also owns and operates a US$1 billion ($1.2 billion) 893mw power and desali­nation facility in Fujairah, one of the largest of its kind in the world. Tang is expecting a contract award from the Fujairah authorities in 1Q2012 to expand capacity of potable water to 130 million gallons per day from 100MGD currently. In Salalah, Oman, it recently completed Phase 1 construction of another US$1 billion power and water generation plant, which should begin generating income when completed next year. Civil

work has also commenced on a $2 billion coal-fired power plant in Andhra Pradesh, India, which should be completed by 2014.

Meanwhile, Sembcorp is extending its reach in China, where it currently operates Shanghaiâ s largest cogeneration plant. On July 6, the company announced plans to expand its water business in the country, including a joint venture to build, own and operate a water reclama­tion plant capable of generating 12,000 cu m of water a day in the Tianjin Lingang Industrial Area.

It is also exploring the option to acquire a municipal wastewater treatment plant and water reclamation plant in Qitaihe, Heilongjiang province. The water reclamation plant will supply water to a power plant owned by China Datang Corp Renewable Power Co â " one of the largest power producers in China. The move will allow Sembcorp â " which has a municipal water treatment plant capable of generating 100,000 cu m a day in Qitaihe â " to expand its product offerings in the city to wastewater treatment and water reclamation.

Separately, Sembcorp will also explore acquiring a municipal wastewater treatment plant, with a capacity of 50,000 cu m a day, in the Yanjiao National High Tech Industrial Development Area in Hebei province, where it already owns and operates a similar facility with a capacity of 70,000 cu m a day.

Utilities unit adds value

Despite all these moves in the utilities sector, ana­lysts say Sembcorpâ s fortunes will be anchored to the offshore and marine sector for years to come. That could see it play second fiddle to SembMarine as far as investors are concerned. â We prefer an immediate exposure to SembMarine, as Sembcorpâ s utilities earnings will accelerate only from 2013,â writes Kim Engâ s Rohan Suppiah. He figures shares in Sembcorp would be fairly valued at $5.40 apiece, based on a sum-of-the-parts calculation. Kim Eng has a â holdâ recommendation on the stock.

Yet, analysts are beginning to take greater account of the emerging strength of Semb­corpâ s utilities business. Lim Siew Khee, an analyst at CIMB Research, says Sembcorp is her â top pick among Singapore conglomerates as a cheaper alternative to the offshore and marine sector, with close to 60% of its earnings coming from SembMarineâ . After taking into account the additional utilities earnings over the next few years, Lim believes the company is worth $6.92 a share. CIMB has an â outperformâ call on the stock.

Meanwhile, Jason Saw, an analyst at DMG & Partners, has cut his earnings forecasts for Sembcorp to account for the lower marine earnings for the period. Yet, he still expects a stronger earnings outlook for its utilities division to help support the value of its shares. He has a â buyâ call on the stock, with a lowered price target of $6.25, down from $6.40 before.

It appears that Sembcorpâ s Tang is already making headway in getting the market to recog­nise the growing value of the companyâ s utilities business.

Sunday, August 14, 2011

Jurong oil caverns: Singapore digs deep to be petro hub

10 Aug 11;

One hundred and thirty metres below the sea bed of Singapore lies a most unusual construction site.

Hundred of workers are carving out a series of enormous caverns in hard rock. The work is laborious, expensive and will take years to complete, but eventually they hope to create a space large enough to store the equivalent of nine million barrels of oil.

Why? Because Singapore, all 700 sq km of it, is running out of room. The company behind the project, state-run Jurong Town Corporation, wants to provide a secure storage site for companies that will pay them for using the space.

Chief executive Manohar Khiatani explains the rationale behind the project.

"Singapore is a small country, so we have to continuously think of ways on how we can optimise land use," he says.

"In order to cater for the future growth of the petrochemical industry, we needed to create more space for storage and that's why we decided to construct these caverns underground.

"Something like this does not make sense for everybody. It makes sense for us because land is a scarce and hence a very valuable resource in Singapore."

Mr Khiatani points out that were a similar facility to be built on the surface "it would take up about 70 hectares of land".

"By going underground, we can save around 60 hectares of land, which is about the size of 70 football fields, and that space can be used for other activities that cannot go underground."
'Very deep'

The project, dubbed the Jurong Rock Caverns, is costing them about $740m (£450m). It is currently in its first phase of construction and is due for completion in 2014.

Five caverns are being dug out under the seabed of Banyan Basin, off Jurong island, a series of mostly-reclaimed islands that house most of Singapore's petrochemical industry.

Some 90 companies from the industry have facilities there, including multinational firms such as Shell and Exxon Mobil.

According to Mr Khiatani, the caverns will cater mainly for companies already producing on Jurong island and their long-term storage needs. However, he acknowledges that the project has its own "share of challenges".

"Operating caverns is different from operating on land, so we will have to learn along the way as the caverns are implemented," says Mr Khiatani.

"What we have to contend with is the fact that we're going very deep, over 100m below ground level, the kind of rock that we have here is different, so we have had to manage that. We are trying to work on and improve the processes."
New technologies

These "processes" involve drilling and blasting each rock cavern with explosives and then lining it in cement, using a high-pressure spray.

New technologies are also being used to prevent potential accidents, such as oil seeping through the rock. Part of this involves the use of a "water curtain" - water-filled tunnels and boreholes that will surround the cavern from the outside - in order to keep it sealed through hydrostatic pressure.

So arduous is the work that construction had to be stopped while the BBC crew filmed and interviewed Mr Khiatani in one of the half-completed caverns.

The cost and scale of the project shows the lengths that Singapore will go to in order to keep up its role as a regional hub for the petrochemical industry.

The nation, the smallest in South East Asia, has no natural resources, but has invested heavily over the decades in creating a refining hub that now processes much of the oil from the region.
Carving niche

According to Julian Ho from the Economic Development Board, the government entity responsible for attracting multinational firms to the city state, Singapore recognises its space and resource "constraints", which is why it has had to provide the right conditions to become Asia's largest export refining centre.

"If you look at companies like Exxon Mobil and Shell, where they have their largest refining downstream and chemical footprint in Asia Pacific in Singapore, I think it reflects a couple of things," he says.

"They have 100% control of their assets, which are very valuable. They have an environment that is stable and certain in terms of how they will operate.

"And thirdly, this is a high-technology complex industry, and when you have that industry here, you really need manpower capabilities to allow them to operate these facilities efficiently."

Singapore's petrochemical industry is now estimated to be worth about $50bn to $65bn (£30bn-£40bn) annually and contributes significantly to the economy, which grew at a slower pace in the last quarter from the previous year.

It accounts for nearly a third of Singapore's total trade in terms of both exports and imports, which is why a project like the Jurong Rock Caverns, despite its unusualness, comes as no surprise.

It shows how determined the small country is to carve out a big niche in the industry.

Thursday, July 28, 2011

Asahi Kasei opens 2nd plant on Jurong Island

AS demand increases for energy efficient 'green tyres', Asia's No 1 S-SBR synthetic rubber maker Asahi Kasei is riding the wave by opening its second plant on Jurong Island. Estimated to cost 20-30 billion yen (S$307-460 million), it is slated for completion by the first half of 2015.

It will produce solution-polymerised styrene-butadiene rubber (S-SBR), a synthetic rubber used in car tyres to maximise fuel efficiency.

Increasing environmental awareness coupled with fears of a new oil shock has led to a recent surge in demand for 'green' tyres, said Asahi Kasei.

Demand for S-SBR, which enables the production of tyres that provide greater fuel efficiency while enhancing safety performance, is therefore growing briskly.

The company estimates that world demand for S-SBR used in fuel-efficient tyres will reach 500,000 tonnes this year, with a projected increase to 1.1 million tonnes by 2020.

Operated by Asahi Kasei Synthetic Rubber Singapore, a wholly owned subsidiary of Asahi Kasei Chemicals Corporation, the S-SBR plant will be the second plant that Asahi Kasei has on Jurong Island.

In a speech delivered during the groundbreaking ceremony, Asahi Kasei president Taketsugu Fujiwara highlighted the strategic positioning of the S-SBR plant in Singapore.

'Singapore is a great place for international business. It has excellent infrastructure. It has free trade agreements with many countries. There is a highly skilled workforce. The government is very understanding and supportive of business. And there is an excellent supply chain system operated by outstanding companies.'

At full operational capacity, the new S-SBR plant is expected to produce 100,000 tonnes of the synthetic rubber per year.

Asahi Kasei estimates that sales generated from the Jurong Island plant will account for 5 per cent of total revenue for Asahi Kasei Chemicals.

Sinopec to open in Singapore its first lubricants plant outside China by Sept 2012

SINGAPORE (AP) -- Sinopec says it plans to open its first lubricants plant outside China in Singapore as part of the refiner's expansion in Asia.

Sinopec, which is also known as China Petroleum & Chemical Corp., said Thursday the $91 million plant will employ about 80 people. It will have initial production capacity of 100,000 tonnes of lubricants per year when it opens by September 2012.

State-owned Sinopec said the Singapore plant will produce 5 percent of Sinopec's total lubricant output.

Tuesday, July 26, 2011

Malaysian firms to build refinery, oil storage plant in Johor, Teluk Ramunia, Sinopec buying big stake in venture for developing oil field

Business Times 27 Jul 11;

(KUALA LUMPUR) KNM Group Bhd and Zecon Bhd have entered into an agreement with Gulf Asian Petroleum Sdn Bhd (GAP) to build a refinery and an oil storage terminal worth a combined RM17 billion (S$6.9 billion) in Teluk Ramunia, Johor, Malaysia's Business Times reported.

GAP, which on April 30, 2010, obtained an approval from the Malaysian Industrial Development Authority for the manufacturing licence for the integrated petrochemical plant, is 50 per cent owned by Mubadala Capital Sdn Bhd (MCSB).

The remaining shares in the firm are owned by Abdul Aziz Hamad Al-Dulaimi, the president of Gulf Petroleum Ltd, whose shareholders include Qatar General Insurance and Reinsurance Company, Al-Mana Group, National Petroleum Group and the banking arm of Al-Sari Group.

MCSB's controlling shareholder, Zainal Abidin Ahmad, is also the chief executive and controlling stakeholder of Zecon.

The deal, bound to cause waves of interest in the oil and gas sector here, came on a day when two other oil and gas projects were announced. Petroleum Bhd and Kencana Petroleum Bhd announced an RM11.5 billion merger plan that will become the country's largest oil and gas service provider.

In a statement to the stock exchange, KNM said it was forming a consortium with Zecon and either a Korean or Chinese contractor to undertake both the projects. The projects comprise a RM15 billion oil refinery and a RM2 billion oil storage terminal.

The refinery will have a capacity of up to 200,000 barrels a day and 525,000 tonnes-a-year polypropylene processing plant, while the oil storage terminal will have a capacity of 2.328 million cubic metres.

The refinery and the storage facility are expected to be completed within 40 months and 18 months respectively, KNM said, adding the refinery project will be funded by 30 per cent equity, with the balance funded through project financing or sukuk issuance.

To help cover some of the storage facility's cost, KNM will also try to arrange a sukuk issuance of up to RM1.5 billion to cover project financing during construction, KNM said.

Apart from the KNM-Zecon announcement, Daya Materials Bhd said it had secured two supply and delivery agreements worth RM27.42 million from Petronas Methanol (Labuan) Sdn Bhd.

Meanwhile, Malaysia's Business Times also reported that China's largest petroleum refiner, Sinopec Petroleum Services Corp (Sinopec), is poised to take a major stake in a planned RM2.06 billion venture to help develop a Petronas marginal oil field located off the coast of Terengganu.

Under the deal, Sinopec will hold 40 per cent stake in the consortium, while Sabio Oil & Gas Sdn Bhd (SOG), a unit of Sabio Technology Bhd (STB), and Iranian group International Oil and Design and Construction Sdn Bhd (IODC)) will have 30 per cent stake respectively.

'This is our maiden foray in the oil and gas industry. We have set up SOG solely for this project and we are optimistic to be given a chance by Petronas to develop this project,' said STB executive chairman Ahmad Sukimi Ibrahim.

Since local participation in the consortium must be a listed entity, STB, which is involved in electronic contract manufacturing services, plans to float its shares in the local bourse soon.

Incorporated in November last year, STB has obtained the approval to list on Bursa Malaysia and will soon be issuing its public prospectus.

Petronas has been given the mandate to develop 27 marginal oil fields out of the current 106 marginal fields in Malaysia, which are estimated to contain 580 million barrels of oil.

Thursday, July 21, 2011

GMR Energy 800 Mw combined cycle project at Jurong Island, Singapore

GMR power ties up $820 mn debt for Singapore plant
BS Reporter / Chennai/ Bangalore July 18, 2011, 0:21 IST

GMR Energy, the flagship energy wing of GMR Infrastructure, has achieved financial closure for its 800 Mw combined cycle project at Jurong Island, Singapore.

The company has secured term loan facility of Singapore dollar 670 million (around $550 million) along with $270 million of credit as working capital with a tenure of 17 years, a company release said.

According to GMR, six international banks namely Axis Bank, CIMB Bank Behrad, KfW IPEX- Bank Gmbh, National Australia Bank, Standard Chartered Bank and WestLB AG have acted as mandated lead managers to the transaction.

"We have received banking community's strong support for financial closure, which demonstrates their confidence in the project. This is a good start and augurs well for the project," G M Rao, group chairman of GMR Infrastructure, said.

GMR Group acquired complete stake of Island Power, which is developing this 800 Mw natural gas based power project in Jurong Island from Intergen NV in 2009. This is the first independent power project (IPP) of the company outside India.

"At a development cost of over $820 million, this power project is expected to be operational in 2013," a company statement said.

GMR has three completed energy projects — barge mounted power plant at Kakinada, 200 MW power plant in Chennai and Vemagiri plant in Andhra Pradesh.

The projects of GMR Infra, under various phases of implementation, are GMR Orissa power project, Talong power project, Bajoli project, Chhattisgarh project, Upper Karnali hydro-power project, Upper Marsyangadi project among others.

The company has a power generation capacity of 808 Mw by March, 2011, and has 11 projects with a total capacity of 8,448 Mw in its portfolio. Of the total projects, 4,138 Mw is under construction and 4,130 Mw is under development by the end of last financial year.

As per officials of GMR Energy, around 800 Mw is likely to be added to company's present capacity of which 25 Mw will be solar and the rest will come from two gas power machines in the present financial year.

In the coal front, the company expects to add around 4,000 Mw of coal based power to its present capacity in next three years.

GMR posted a loss of Rs 929.64 crore in the last financial year as compared with a profit of Rs 158.4 crore in the corresponding period last year.

Revenue rose by 26 per cent to Rs 5,773.8 crore during this period. Meantime, the company has posted a 14 per cent increase in operating profit to Rs 1,555.5 crore by end of March, 2011.

Thursday, July 7, 2011

Jellyfish Invasions Force Shutdowns at 3 Separate Nuclear Plants

Natalie Wolchover Yahoo News 8 Jul 11;

A nuclear power plant on the coast of Israel was forced to shut down this week when its seawater cooling system became clogged with jellyfish. A similar incident temporarily disabled two nuclear reactors at the Torness power station on the Scottish coast last week. A week before, a reactor in Shimane, Japan was crippled by yet another jellyfish infiltration.

Amid speculation that warm waters and ocean acidification — both driven by climate change — are boosting jellyfish populations, are these three incidents signs of a growing trend?

"The several [power plant incidents] that happened recently aren't enough to indicate a global pattern. They certainly could be coincidental," said Monty Graham, a jellyfish biologist and senior marine scientist at the Dauphin Island Sea Lab off the Gulf Coast of Alabama.

Graham said there have been dozens of cases of jellyfish causing partial or complete shutdowns of coastal power plants in the past few decades, as well as shutdowns of desalination plants. Steve Haddock of the Monterrey Bay Aquarium Research Institute said a power plant in Australia was shut down by jellyfish as long ago as 1937. Such events aren't surprising; all these plants draw water out of the ocean, and they are already fitted with filtration devices called flumes that remove jellyfish and other debris.

"Only when you have a huge influx of jellies do they overwhelm the flumes," Graham told Life's Little Mysteries. This happens when a jellyfish bloom — a huge swarm of adult specimens brought together by ocean currents — flows into a power plant's filtration system.

Jellyfish blooming occurs mostly in the spring and summer months, which may partly explain why the three recent power plant incidents happened in close succession. While conditions brought on by climate change may also be creating more jellyfish blooms than there used to be, signifying a worldwide jellyfish population explosion, researchers can't tell whether that's occurring; they began tracking jellyfish populations too recently.

"In some places, there have been some dramatic population increases in the past few decades, but overall, it's hard to identify a trend," Graham said. "We don't have the hard data because we haven't been looking at jellyfish on a long enough timescale."

Claudia Mills, a jellyfish biologist at the University of Washington, said that there are some documented cases of local population increases. For example, an invasive species has been spreading in the Mediterranean for decades, and may be the culprit that clogged the Israeli plant. However, Mills told us, a lot of the concern about rising populations on a larger scale is based on hyperbole. "We don't know what is going on with jellyfish in most parts of the world," she wrote in an email. [Read: Jellyfish Swarms: Menacing or Misunderstood?]

Some researchers do suspect that populations are rising, as jellyfish may thrive in warmer oceans. "Jellyfish populations spike and wane with climate variability, so it's not hard to make the logical leap that if climate is changing long-term, we'll likely see a population change," Graham said. He is conducting research to investigate whether jellyfish populations are increasing globally, and if so, why.

Of course, a higher incidence of power plant-jellyfish standoffs (if, in fact, the incidence is higher) could also reflect the increasing number of coastal power plants, Graham said.

Either way, getting the power plants back online is not such a difficult fix.

"Plants only have to deal with a heavy-duty problem once or twice and they'll realize it's such a huge cost to them that they'll introduce countermeasures," he said. These include additional filters and a jet bubble system that makes incoming jellyfish float to the surface, where they can be skimmed off. "In some cases, the plants can just monitor for jellies and shut down temporarily when there's a bloom."

Wednesday, June 22, 2011

Singapore, a regional natural gas hub?

Lynda Hong Ee Lyn Today Online 22 Jun 11;

SINGAPORE - Abundant enough to sustain world production for over 250 years and available all over the world, natural gas produces one of the lowest levels of carbon emissions when burnt for electricity production.

And Singapore is well-positioned to be a regional natural gas hub, said Dr Birol Fatih, chief economist of the International Energy Agency (IEA).

Natural gas was one of the main topics touched on by Dr Birol, who spoke at the Energy Market Authority's (EMA) Distinguished Speaker Programme, which was attended by nearly 300 industry players in the energy sector.

Sharing key findings from IEA's special report, "Are We Entering a Golden Age of Gas?" Dr Birol said that the building of an LNG terminal in Jurong Island was "very timely".

"It's definitely going to put Singapore in a very good position in the region to be a regional hub. This will definitely put Singapore in a very advantageous position in the region," said Dr Birol, who was named by Forbes Magazine as the world's fourth most powerful and influential person in the global energy scene,

EMA CEO Chee Hong Tat said the LNG terminal is on track to complete by the second quarter of 2013.

When in operation, Singapore's LNG terminal will be Asia's first open-access, multi-user LNG terminal, allowing different companies to process LNG by processing and storing up to six million tonnes per annum (Mtpa) in its three tanks.

Mr Chee also said LNG has seen a strong uptake by Singapore companies, having sold about 2.3 Mtpa of LNG to mostly power generation companies as of end-May this year. There is also interest from industrial companies outside the power generation sector to purchase LNG to fuel their new businesses and project expansions, added Mr Chee.

Compared to other fossil fuels, natural gas is considered by industry players and academics to be the "cleanest", producing less carbon than other hydrocarbon fossil fuels, thereby reducing carbon emissions.

Energy production and sources have been responsible for producing two-thirds of the world's carbon emissions, noted Dr Birol.

However, natural gas alone cannot help mitigate carbon emissions from climate change. Renewable energy sources have to be part of the balance, and so far, all countries with a strong renewable energy programmes are backed their governments, he said.

Wednesday, June 1, 2011



  人造胶厂商德国朗盛公司(LANXESS)计划投资2亿欧元(约3亿5000万新元),在裕廊岛建造一个全球最大的钕聚丁二烯(neodymium polybutadiene)胶厂,这也是朗盛在裕廊岛的第二项投资。

  这个胶厂每年的产能将为14万吨,预计于2015年上半年启动,可创造约100个工作机会。这个工厂将坐落在朗盛已经动土的丁基橡胶(butyl rubber)厂旁边。

  朗盛首席执行员贺德满博士(Axel C. Heitmann)今天将与经发局主席叶成昌签署谅解备忘录。








Sunday, May 15, 2011

KL building massive oil-gas hub in Johor

$24b project on the coast in Pengerang is seen as direct threat to Singapore
Leslie Lopez
Straits Times 14 May 11;

KUALA LUMPUR: Malaysia has unveiled ambitious plans to establish a major oil-and-gas hub in the eastern corridor of the Johor coast, posing a direct threat to Singapore's position as the region's premier energy trading and refining centre.

National oil corporation Petroliam Nasional, or Petronas, said yesterday that it will spend RM60 billion (S$24 billion) to build an integrated downstream oil and gas complex in Pengerang.

The Refinery and Petrochemicals Integrated Development, or Rapid, will feature a crude oil refinery with a throughput capacity of roughly 300,000 barrels per day (bpd), a naphtha cracker and several petrochemical complexes.

The project, which represents the single largest undertaking by Petronas to date, is part of a major push by the administration of Prime Minister Najib Razak to draw much-needed foreign investment and create new sources of growth for the Malaysian economy.

Datuk Seri Najib, who officiated at the unveiling of Malaysia's latest oil and gas undertaking, described it as a bold push by Petronas to seize opportunities presented by Asia's robust energy and chemical markets.

Malaysia also took pains to dispel the widely held view that the project represented Kuala Lumpur's latest effort in the decades-old economic rivalry with Singapore.

Petronas chief executive Shamsul Azhar Abbas noted that Rapid would complement Singapore's existing petrochemical industry. 'Let's not view Singapore as a competitor,' he told reporters.

But industry executives and private economists insisted otherwise.

'Malaysia could have easily expanded its current facilities. Rapid is clearly designed to compete,' said a senior executive of a foreign oil services company in Kuala Lumpur, referring to Petronas' existing oil refinery and petrochemical facilities in the coastal regions of Terengganu and Pahang.

Over the years, Kuala Lumpur has moved to develop its airports, port services and bunkering sector to claw back business from Singapore. But those efforts have yet to bear fruit.

'The emphasis here is putting in the hardware by building and ignoring the software. We keep losing out because Malaysia lacks the ability to deliver world-class services,' lamented a chief executive of a large infrastructure group in Malaysia who asked not to be named.

Rapid, which has earmarked just over 1,000ha of coastal land for development, will be different, argue proponents of Petronas' new initiative.

Malaysian planners note that Singapore is hitting the limits of its ability to expand storage capacity. To meet growing demand, Singapore has been forced to pursue novel projects, such as carving tunnels and caverns beneath the seabed west of the island to create storage space for oil.

Singapore has an export refining capacity of 1.3 million bpd, compared with Malaysia's 560,000 bpd capacity.

Malaysian government officials insist that Asia's growing appetite for crude oil will create room for another player.

One major boost has been the March disasters in Japan.

The earthquake and tsunami, which damaged power facilities and triggered a nuclear crisis, have touched off a scramble among key Asian economies to find alternative locations for power plants and manufacturing facilities to ensure security of supply in the event of a major natural disaster.

Japan, which has pledged to close several older nuclear plants, will need to turn to alternative power sources, such as liquefied natural gas. So will South Korea and Taiwan, which will also need to relocate critical industries, such as petrochemicals and oil refining, to safer locations.

'Rapid has the land and infrastructure to cater for this relocation,' said a senior government official involved in the planning of the Petronas project.

The Rapid development will also feature a RM5 billion deepwater petroleum terminal, which is being built by a consortium led by Dailog, a publicly listed oil and gas services company controlled by low-profile businessman Ngau Boon Keat. The first phase of the project is expected to come onstream in 2016.

With increased refining and chemical processing in Malaysia, Kuala Lumpur is hoping to take a slice of Singapore's oil and derivative trading over the next decade, government officials said.

Petronas to invest RM60b in Johor complex
It will be Malaysia's largest single downstream oil investment; project to complement rather than compete with Singapore, says Petronas
S Jayasankaran Business Times 14 May 11;

PRIME Minister Najib Razak yesterday announced that national oil company Petronas will invest RM60 billion (S$24.9 billion) to develop the Refinery and Petrochemical Integrated Development (Rapid) complex in Pengerang, Johor.

According to Petronas, it is being positioned to 'complement', rather than to compete, with Singapore.

The single largest downstream oil investment in the country, Rapid will comprise a crude oil refinery capable of producing 300,000 barrels per day; a naphtha cracker able to produce 3 million tonnes of ethylene, propylene and butane-to-pentane olefines; and a petrochemicals development, together with an unspecified foreign partner, which will produce three million tonnes of highly specialised petrochemical products a year.

'I am told that Rapid's oil refining capacity is greater than the combined capacities of Petronas' existing refineries in Malacca and Kerteh,' a smiling Mr Najib told guests at the project's launch. 'Its petrochemicals development is also expected to exceed the combined capacities of the Gebeng Integrated Petrochemical Complexes and Kerteh.'

It will also provide some 20,000 jobs during its construction phase and up to 4,000 jobs to highly-skilled oil and gas workers upon its completion in 2016.

'I am confident this landmark undertaking by Petronas will prove to be yet another significant milestone not only for the company's corporate history but also for Malaysia's industrial development,' Mr Najib said.

The premier added that the oil company was also reassessing the feasibility of a liquefied natural gas (LNG) receiving and re-gasification terminal in the area to help complement the energy needs of the project.

The development will give Mr Najib's Economic Transformation Programme an unexpected boost as it hadn't been factored in originally as part of the country's multibillion ringgit investment transfusion to propel it into the high income leagues. 'This wasn't part of the original ETP,' Petronas chief executive Shamsul Azhar Abbas told reporters at a media briefing later. 'This is a bonus.'

But given the massive resources required by Rapid, Petronas's ability to pay high dividends to the government could be sorely tested. Last year, the oil firm contributed over 35 per cent of government revenues.

Even so, the successful rollout of Rapid could witness a surge in foreign direct investment (FDI) as ancillary industries - the life sciences, pharmaceuticals, agriculture, etc - that rely on the project's by-products set up shop around the development. Indeed, Mr Najib described the project as a 'major trigger' for FDI.

Meanwhile, Ghani Othman, the chief minister of Johor, told reporters that there was no shortage of land in the area available for interested foreign parties. Rapid itself requires 1,012 hectares while a RM5 billion oil terminal project seven kilometres away leased 809 hectares from the state government yesterday.

Petronas' Mr Shamusl said that Rapid would 'complement' Singapore's petrochemicals business. 'Let's not view Singapore as a competitor,' he said. 'There are opportunities where we can do business integration because petrochemicals are not like any other product. Once you start cracking the naphtha, you get ... a lot of flows of tail-end products which will need to find a home.'

He said Petronas would not only seek 'full business integration' with Singapore but also the company's other petrochemical facilities in Malaysia. On foreign interest, Mr Shamsul revealed that foreign parties from 'earthquake-prone' countries who were reluctant to expand further in their home countries have already shown 'a lot' of interest. 'They're having problems in terms of expansion ... so what they have to do right now is move their expanded capacity out of the country into this particular region,' he said.

He stressed that the foreign partners in Rapid would be 'high-end companies' involved in specialty products that may also set up their own facilities in the region to help lower production costs.

RM60bil Petronas project will fuel massive spin-offs, says PM
Florence A. Samy The Star 14 May 11;

KUALA LUMPUR: Petronas will invest in a major RM60bil integrated refinery and petrochemical complex in Pengerang, Johor, touted to be its largest.

To be known as the Refinery and Petrochemicals Integrated Development (Rapid) project, it is is expected to be commissioned by the end of 2016, as part of the national oil company's efforts to expand its downstream production.

Prime Minister Datuk Seri Najib Tun Razak confirmed this, following a StarBiz breaking news story on Wednesday.

The mammoth project is expected to create at least 20,000 jobs during the construction phase and 4,000 potential jobs for highly-skilled workers.

This does not include the many spin-offs in related sectors, Najib said when announcing the project at the Petronas headquarters here yesterday.

"It is truly a remarkable initiative and a significant landmark for Malaysia. The project presents Malaysia with a major vehicle to attract foreign direct investments, bolster private investment and expand the country's access to world-class technologies.

"It will also provide avenues for a new generation of technical professionals to develop their skills and capabilities," he said, adding that the Government would provide its full support and assistance.

The Rapid project, Najib said, would consist of three main components:

> A crude oil refinery with a capacity of about 300,000 barrels per day, larger than the combined capacities of its refineries in Malacca and Kerteh.

> A naphtha cracker with the ability to produce three million tonnes of ethylene, propylene as well as C4 and C5 olefins; and

> A joint petrochemical development with a combined production capacity of three million tonnes per year, more than the combined production capacities of its integrated complexes in Kerteh and Gebeng, Pahang.

Najib, who is also Finance Minister, said although the Rapid project was not part of the entry point projects under the Economic Transformation Programme, it was still in line with plans to turn Malaysia into a leading petroleum industry hub in the region.

The area, Najib said, was chosen because of its large land acreage, strategic location near major international shipping lanes, deepwater port facilities and proximity to regional demand centres.

Malaysian oil giant to build $16b complex in Johor
Asia News NetworkBy Risen Jayaseelan and Jeeva Arulampalam in Petaling Jaya The Star/ANN Yahoo News 11 May 11;

Petaling Jaya (The Star/ANN) - Malaysia's state oil giant, Petroliam Nasional Bhd (Petronas), will announce on Friday plans to invest around 50bil ringgit (US$16.7bil) in an integrated downstream oil and gas complex in Pengerang, Johor, reliable sources said.

Dubbed Rapid or Refinery And Petrochemical Integrated Development, the project is aimed at building something "larger than Kertih" and will eventually include multinational oil and gas companies as joint-venture partners.

The integrated development will not only include oil refining and petrochemical activities, but include a gas power plant and other "supportive industries" said sources.

Rapid is a project identified in the Economic Transformation Programme (ETP), which is led by the Performance Management & Delivery Unit (Pemandu).

One of the reasons why Pengerang was chosen is because its waters can reach depths of more than 20m, which is what is needed for very large crude carriers (VLCC) and ultra large crude carriers.

The Johor government will be a joint-venture partner of the project and will provide the land.

Sources indicate that Petronas' Rapid project complements plans for the 5bil ringgit independent deepwater petroleum terminal in Pengerang, which is to be the first deepwater terminal in South-East Asia.

The terminal is a tankage facility for handling, storing, blending and distribution of crude oils and petroleum products with marine facilities capable of handling VLCCs.

Part of the thinking behind Rapid was to replicate what Singapore has already done successfully, sources said. Singapore's oil refining businesses only started around 10 years ago.

Singapore has an export refining capacity of 1.3 million barrels per day, compared with Malaysia's 560,000 barrels per day, according to the ETP roadmap.

Singapore Refining Company Pte Ltd, which operates a refinery on Jurong Island, is capable of processing 290,000 barrels of crude oil per day.

Other major refineries in Singapore include ExxonMobil's refinery in Jurong that process about 605,000 barrels of crude per day and Shell's Pulau Bukom Refinery with some 500,000 barrels of crude oil per day.

Plans for Petronas to develop Johor's Pengerang into a sizeable force in the oil and gas (O&G) space are not new.

Last November, the Government said Petronas would play a major role in the development of Johor's south-east areas of Teluk Ramunia and Pengerang into a O&G hub in the region.

It was then said that the investments in the hub would come from Petronas and its international partners and the investments would bring major development into Johor's south-east areas and could turn Teluk Ramunia and Pengerang into a new Kertih.

Petronas chief executive officer Datuk Shamsul Azhar Abbas confirmed then that Petronas was talking with several international investors to invest in Teluk Ramunia and Pengerang.

Once a sleepy fishing village in Terengganu, Kertih is now a thriving township due to O&G related activities with Petronas as the main driver in the O&G sector there.

The Petronas Kertih Refinery is the national oil company's first oil refinery in Malaysia, and processes 49,000 barrels of Malaysian light, sweet crude oil per day.

In total, Petronas owns and operates four refineries (three in Malaysia and one in South Africa) with a total refining capacity of more than 448,000 barrels per day.

The Government had also said then that while the investments would come from Petronas and its partners, the Government was looking into allocating money for infrastructure developments in the areas.

Another aspect of the oil and gas thrust in the ETP (and which is linked to the Rapid project) is for Malaysia to venture into the lucrative area of oil trading. Singapore accounts for hundreds of billions of oil trading every year, an area of business that is virtually absent in Malaysia.

According to the ETP roadmap, Singapore, by 2007, had built a significant trading business worth more than 1 trillion ringgit in physical oil trade and 2 trillion ringgit in derivative trade.

Sources said the Government may consider providing additional incentives to attract oil trading firms to be located in Johor.

Monday, May 9, 2011

Tuas Power to decide this year on Phase 2 at Jurong Island

Substantial portion of Phase 1 output already committed to new customers
Ronnie Lim Business Times 10 May 11;

CHINA Huaneng-owned Tuas Power (TP) expects to decide 'sometime this year' on embarking on Phase 2 of its $2 billion clean coal/ biomass multi-utilities facility on Jurong Island, TP's president and chief executive Lim Kong Puay told BT yesterday.

This is because a 'substantial portion' of the steam and power output from Phase 1 of the Tuas Multi-Utilities Complex (TMUC) - currently under construction - has already been committed to new petrochemical customers there, he disclosed.

They include Germany's Lanxess and Taiwan's Dairen Chemicals, each of which is building mega $500 million to $700 million plants there, with TP currently talking to 'a few others', Mr Lim added.

The genco embarked on Phase 1 of TMUC - producing 200 tonnes of steam per hour and 100 megawatts of power - in late-2009, and expects to start supplying customers with utilities like steam from the second half of next year.

Both Lanxess, which is building a state-of-the-art $680 million synthetic rubber plant here, and Dairen, which is investing $500 million in three chemicals plants on the island, have targeted start-ups in the first quarter of 2013.

In total, TP is targeting its TMUC project to provide 'one-stop, third-party utility services to the wide-range needs of approximately 15 petrochemical customers in the surrounding area', the genco revealed in its latest tender, called last Friday, for an EPC contractor to provide the utilities piping connecting TMUC to its new customers.

TMUC is being developed concurrently on two sites about 2 km apart on Jurong Island, the tender showed.

The 14-hectare Site 1 at Tembusu Crescent/Avenue - where the main power and steam will be produced, and including a desalination plant - has sea frontage to allow feedstocks comprising low-ash, low-sulphur coal and tropical biomass, mainly palm kernel, to be shipped in from suppliers including in Indonesia.

Site 2, occupying 8.75 hectares at the island's Banyan sector, houses plants for demineralised water treatment, waste water treatment and high-grade industrial water.

Lanxess' contract with TP, for instance, covers the supply of high-grade industrial water and demineralised water, apart from steam.

TMUC has been designed to produce in total 160 MW of power and 1,000 tonnes per hour of steam, with its seawater reverse osmosis plant designed to supply 20 million gallons of water per day.

TP is Singapore's third largest genco with 2,670 MW of capacity at its main Tuas power station.

The company has been aggressively expanding beyond power generation to supplying multi-utilities to petrochemical and other industries, like Finland's Neste Oil which produces renewable bio-diesel at a nearby $1.2 billion Tuas plant.

The genco is also spending another $470 million to 'repower' the first of two older, steam plants at its Tuas station into a more efficient combined cycle gas turbine plant, making this its fifth CCGT.

Tuesday, April 12, 2011

Coal gasification could be a future feedstock option in Singapore

Chemical plants and utilities such as steam and power will benefit from it
Ronnie Lim
Business Times 13 Apr 11;

SINGAPORE is literally leaving no stone unturned in its search for additional strategic feedstocks for the oil refining/petrochemicals industry on Jurong Island.

It is now looking at coal-to-chemicals as another option, and wants to evaluate having a coal gasification plant there to provide syngas feedstocks for chemical plants and utilities such as steam and power.

This latest study by the Economic Development Board - in cooperation with the Energy Market Authority and JTC Corporation - adds to two ongoing feedstock studies looking into the import of LPG or liquefied petroleum gas, and also the use of 'green' feedstock, such as palm oil, sugarcane and plant biomass.

So far, the petrochemical crackers here - operated by Petrochemical Corporation of Singapore, Shell and ExxonMobil - use mainly naphtha, and more recently heavy 'bottoms' such as hydrowax from the refineries to produce the feedstock needed by downstream chemical plants. It is understood that more optimal use of such 'bottoms' is also being looked into.

The studies come under the government's Jurong Island version 2.0 initiative - set to be unveiled mid-year - which focuses on feedstock options and infrastructure developments to create new competitive advantages for the Singapore chemicals sector.

'The latest study will look into coal gasification to produce competitive supply of hydrogen and carbon monoxide feedstock for the chemical plants and also for utilities,' an EDB spokesperson told BT last Friday.

Wikipedia explains that 'coal gasification is the process of producing coal gas, a type of synthetic gas - a mixture of carbon monoxide (CO) and hydrogen (H2) gas - from coal.' Coal gas (also known as town gas) can be converted into transportation fuels such as gasoline and diesel through additional treatment.

EDB said that while the main disadvantage of coal is its environmental impact, coal gasification technology provides the potential for a 'clean coal' plant and development of new technologies in carbon capture and use to further diminish the carbon footprint in future.

EDB's tender for a consultant states that 'as there have been prior indications that companies may wish to supplement the feedstock business of a coal gasification plant with power generation, we wish to understand the possible business models that industry may propose given different specifications of feedstock, both feedstock and utilities, as well as what a model that optimises price competitiveness and minimises carbon footprint may entail'.

This suggests that the coal gasification plant project could also interest generating companies here, especially Tuas Power which is already building a $2 billion, coal/biomass-firing multi-utilities complex on Jurong Island.

But environmental sustainability is clearly a top concern in the study.

'The evaluation should also take into account a carbon tax in view of a possible international agreement on carbon mitigation, which could lower the profitability of the plant,' the EDB tender said.

'The study should also make explicit the assumptions that are being used, particularly to achieve the carbon footprint,' it added, specifying that the plant must also meet current NEA standards and cover areas right down to disposal of pollutants.

Wednesday, March 23, 2011

























Wednesday, March 16, 2011




  中国石油化工公司(China Petrochemical, Sinopec)计划在新加坡建设一座年产能10万吨的润滑脂(lubricant grease)工厂。



Monday, March 14, 2011

Countries taking another look at nuclear power

Business Times 15 Mar 11;

(NEW YORK) Global expansion of nuclear power may draw more scrutiny as Japan struggles with reactors crippled by the quake.

'This is obviously a significant setback for the so-called nuclear renaissance,' said Peter Bradford, a former member of the US Nuclear Regulatory Commission. 'The image of a nuclear power plant blowing up before your eyes on a TV screen is a first.'

China may consider the effects of the nuclear accident as it completes its energy plans for the 2011-2015 period, Xie Zhenhua, vice-chairman of the National Development and Reform Commission, said. China is tripling the number of its reactors, building 27 units to add to the 13 now operating on the mainland, according to the World Nuclear Association.

'Evaluation of nuclear safety and the monitoring of plants will be definitely strengthened,' Mr Xie said.

India, which plans for a 13-fold increase in nuclear power generation, will reconsider its expansion as Japan's worst accident in at least 33 years forces a safety review of existing and proposed plants, Nuclear Power Corp of India said.

'This event may be a big dampener for our programme,' Shreyans Kumar Jain, chairman of India's state-run monopoly producer, said in a telephone interview from Mumbai. 'We and the Department of Atomic Energy will definitely revisit the entire thing, including our new reactor plans, after we receive more information from Japan.'

Germany's energy agency Dena recommends a return to phasing out nuclear power and switching off reactors that are similar to those crippled in Japan, the German newspaper Handelsblatt reported, citing an interview with the agency's head Stephan Kohler.

There are 442 reactors worldwide that supply about 15 per cent of the globe's electricity, according to the London-based World Nuclear Association. There are plans to build more than 155 additional reactors, most of them in Asia, and 65 reactors are currently under construction, the association said.

Japan gets about a third of its electricity from 54 nuclear power plants, the third-most after the US and France. Two reactors are under construction and 12 more are planned, according to the association.

In the US, companies including Southern Co and NRG Energy have submitted applications to build as many as 21 new reactors, adding to the 104 existing units.

'Certainly it's going to cause some reappraisals because this is what you call a 'show-stopping' event,' said Robert Alvarez at the Washington-based Institute for Policy Studies.

US utilities cancelled 14 nuclear plant orders in the wake of the 1979 partial meltdown at the Three Mile Island reactor in Pennsylvania, according to the International Atomic Energy Agency.

'The arguments that held sway during the Three Mile Island days will hold sway today with this accident,' said Tom Cochran, a nuclear physicist at the New York-based Natural Resources Defense Council.

The US should slow the construction of new domestic nuclear power plants until officials can assess whether the situation in Japan signals a need for additional safety measures, said Senator Joseph Lieberman of Connecticut.

Twenty-three nuclear power plants in the US were built according to designs that are similar to the Dai-Ichi plant's, he said.

Problems at the reactor may encourage the replacement of older models, said Sergei Novikov, a spokesman for Russia's nuclear holding company Rosatom Corp. 'The global nuclear industry will speed up phasing out first-generation power units and start building new ones,' he said.

Rosatom is building 15 new reactors worldwide, more than any other international supplier, five of them outside Russia. -- Bloomberg

Analysis: Nuclear Power Growth At Risk If Japan Plant Leaks
Gerard Wynn and Bernie Woodall PlanetArk 14 Mar 11;

The growing risk of a significant radiation leak at two Japanese nuclear power plants following Friday's earthquake and tsunami threatens to hurt an industry that has enjoyed a rebirth since the Three Mile Island accident in 1979 and the Chernobyl disaster in 1986.

On Friday, nuclear power advocates and environmentalists staked out familiar ground over the incident. But a wider public debate may be ignited if a major radiation leak occurs in Japan, said Paul Patterson, an energy analyst with consultants Glenrock Associates in New York.

That debate has been largely muted since the 1980s when rock concerts were held to galvanize opposition to nuclear power after the Three Mile Island incident in Pennsylvania and the popular movie "The China Syndrome," that raised awareness of the dangers of a nuclear reactor meltdown.

"The severity of what happens is what is important," Patterson said of the impact of the Japanese incident.

If there is a substantial radioactive release, there could even be questions about whether it could travel on the Pacific jet stream to the U.S. West Coast.

"It is serious and it could lead to a meltdown," said Mark Hibbs, a nuclear expert at the Carnegie Endowment for International Peace. "And what we're seeing, barring any information from the Japanese that they have it under control, is that we're headed in that direction."

But Naoto Sekimura of the University of Tokyo, said that a major radioactive disaster was not likely.

An 8.9-magnitude earthquake centered in northern Japan triggered a series of events at two Tokyo Electric Power Co plants that created conditions for a radioactive leak because there wasn't electric power to circulate cooling water over superheated uranium fuel rods.

The two TEPCO plants, the Daiichi plant and the Daini plant are around 40 miles from the epicenter of the earthquake that led to a tsunami and probably killed more than 1,000.

Nuclear industry advocates on Friday were saying that the ability of the nuclear reactors in Japan to largely withstand the power of the earthquake shows how safe nuclear power is.

But that was before a series of scary announcements from TEPCO that it had lost the ability to control pressure at several reactors and that it was having trouble with a valve that would allow reactor pressure to be eased.

Thousands of residents were evacuated from the immediate area of the Fukushima plants, about 150 miles 240 km north of Tokyo.

Industry experts said the precautions taken at Fukushima showed that enhanced security at nuclear power plants should prevent any disaster. But green groups said the threatened leak showed that the risks were still too high.

"I wouldn't expect there to be a radiation emergency ultimately, they may have something to fix but it's a precaution more than anything else," said Sue Ion, former chief technology officer at British Nuclear Fuels, after Japan declared an atomic power emergency.

Altogether, some 11 Japanese reactors shut down after the earthquake.

Successive layers of security should prevent any leak of radiation, said Jeremy Gordon, an analyst at the World Nuclear Association based in London.


"The reactor designs that are up for consideration today are generation three where the safety systems operate at an even higher level," said WNA analyst Jonathan Cobb.

But environmental groups said the threat of a radiation leak underscored the general risks from atomic energy.

"We've opposed nuclear power for decades, and this is another proof that it can't be safe," said Sven Teske, director of renewable energy at Greenpeace International.

A leading U.S. scientist group said the incident highlighted the grave risk of inadequate back-up power to cooling systems at U.S. facilities.

New interest from governments and investors in nuclear power follows the development of more advanced plants, and a new focus on security of energy supply and moves to reduce carbon emissions. Nuclear plants generate low-carbon power in contrast to fossil fuels and can produce constantly unlike wind and some other clean energy sources.

The Vienna-based International Atomic Energy Agency (IAEA) estimated last month that about 10 countries have decided to introduce nuclear power and started preparatory infrastructure work, up from four in 2008.

(Additional reporting by Daniel Fineren, Fredrik Dahl, Karolin Schaps, and Scott DiSavino; editing by Martin Howell)

Analysis - Japan accident shows dilemma over atom plant sites
Alister Doyle Reuters 14 Mar 11;

OSLO (Reuters) - Japan's nuclear accident exposes the dilemma of whether to build power plants on tsunami-prone coasts or inland sites where water supplies are unreliable, a problem likely to be aggravated by climate change, experts say.

Many of the world's 442 nuclear power reactors are by the sea, rather than by lakes or rivers, to ensure vast water supplies for cooling fuel rods in emergencies like that at the Fukushima plant on Japan's east coast.

"It's quite a conundrum," said Ian Jackson, a nuclear energy fellow at Chatham House in Britain. "If you are in a geologically stable area, a coastal location is still the best option."

Japan was scrambling to avert a meltdown at the Fukushima plant after Friday's devastating quake and tsunami, which killed at least 10,000 people.

Inland, water supplies can be more vulnerable to heatwaves, floods, temperature swings and dam failures. Water is a prime consideration in siting decisions that include staying clear of geological fault lines, flight paths and cities.

A 2003 heatwave in Europe, for instance, forced Electricite de France to close or lower output at about half its 19 nuclear plants because of temperature limits on the water it returns to rivers such as the Rhone.

Excessively high temperatures can kill fish and other river life, as well as reduce output from the power plants.

"If climate impacts include flood, heatwaves and droughts then you can expect that nuclear plants will have to shut down more often," said Rianne Teule, a nuclear expert with the environmental group Greenpeace in South Africa.

"It will bring more risks," she said. Greenpeace favors a phase-out of all nuclear power.

A study in the journal Nature found that it was very likely that global warming, stoked by human emissions of greenhouse gases, had contributed to the extreme temperatures of the 2003 European heatwave and hence the severity of its impact.

Rising sea levels are also a long-term consideration for siting power plants that will operate for decades. Higher sea levels would aggravate storm surges or the impact of tsunamis.

The U.N. panel of scientists said in 2007 that the sea level is likely to rise by between 18 and 59 cms (7 and 24 inches) this century, more if there is a big thaw in Greenland and/or Antarctica.

"Deciding where to site a plant is tricky," said Nils Boehmer, a nuclear physicist at the environmental group Bellona in Norway.

Placing plants inland often exposes them to the risk of higher water temperatures in summer, reducing generating capacity. "Then you end up that the best place is on the coast where there is a risk of a tsunami," he said.

An added consideration is that environmental rules are getting tougher in many nations.

Last year, Exelon Corp. said it would shut its Oyster Creek nuclear power plant in New Jersey in 2019, about 10 years before its license expires, as part of an agreement to let it keep operating without expensive cooling towers.

New Jersey had wanted Exelon to install a new cooling system at the plant, the oldest reactor operating in the United States, to reduce the threat to fish and other life.

(Editing by Tim Pearce)

What will spark the next Fukushima?
An untrustworthy nuclear industry, incompetently regulated, is leading the world into greater and greater danger
John Vidal 14 Mar 11;

The gung-ho nuclear industry is in deep shock. Just as it and its cheerleader, the International Atomic Energy Agency, were preparing to mark next month's 25th anniversary of the Chernobyl accident with a series of self-congratulatory statements about the dawning of a safe age of clean atomic power, a series of catastrophic but entirely avoidable accidents take place in not one but three reactors in one of the richest countries of the world. Fukushima is not a rotting old power plant in a failed state manned by half-trained kids, but supposedly one of the safest stations in one of the most safety-conscious countries with the best engineers and technologists in the world.

Chernobyl blew up not because the reactor malfunctioned but because an ill-judged experiment to see how long safety equipment would function during shutdown went too far. So, too, in Japan, it was not the nuclear bits of the station that went wrong but the conventional technology. The pumps did not work because the power supply went down and the back-up support was not there because no one had thought what happened was possible.

Even though Japan had been warned many times that possibly the most dangerous place in the world to site a nuclear power station was on its coast, no one had taken into account the double-whammy effect of a tsunami and an earthquake on conventional technology. It's easy to be wise after the event, but the inquest will surely show that the accident was not caused by an unpredictable natural disaster, but by a series of highly predictable bad calls by human regulators.

The question now is whether the industry can be trusted anywhere. If this industry were a company, its shareholders would have deserted it years ago. In just one generation it has killed, wounded or blighted the lives of many millions of people and laid waste to millions of square miles of land. In that time it has been subsidised to the tune of trillions of dollars and it will cost hundreds of billions more to clean up and store the messes it has caused and the waste it has created. It has had three catastrophic failures now in 25 years and dozens more close shaves. Its workings have been marked around the world by mendacity, cover-ups, secrecy and financial incompetence.

Sadly, the future looks worse. The world has a generation of reactors coming to the end of their days and politicians putting intense pressure on regulators to extend their use well beyond their design lives. We are planning to double worldwide electricity supply from nuclear power in the next 20 years, but we have nowhere near enough experienced engineers to run the ever-bigger stations. We have private companies peddling new designs that are said to be safer but which are still not proven, and we have 10 new countries planning to move into civil nuclear power in the next five years.

It gets worse. More than 100 of the world's reactors are already sited in areas of high seismic activity and many of 350 new stations planned for the highly volatile Pacific rim where earthquakes, tsunamis and other natural hazards are certain to happen. We still have not worked out how to store waste and, we now know that we cannot protect stations from all eventualities.

What the industry and governments cannot accept are the two immutable laws of life – Murphy's law and the law of unintended consequences. If something is possible to go wrong then it will, eventually. It may be possible to design out the technological weaknesses but it is impossible to allow for the unknown unknowns.

Next time the disaster may have nothing to do with an earthquake or a tsunami, but be because of terrorism, climate change, a fatal error in an anonymous engineering works, proliferation of plutonium or a deranged plant manager. If there were no alternatives than employing nuclear power to light up a bulb or to reduce carbon emissions then the industry and governments might be forgiven. But when the stakes are so high, the scale is so big and there are 100 other safer ways, it seems sheer folly to go on in this way.