Thursday, October 3, 2013

Jurong Island to launch LPG project soon


JI 2.0 upgrades include 2nd road link aimed at boosting petrochem hub

[SINGAPORE] More upgrading additions to Jurong Island - including a liquefied petroleum gas (LPG) terminal to import the alternative feedstock for petrochemical crackers here, and a safety and risk management centre - are expected to be launched soon.

Studies are also well underway for longer-term projects, such as having a second road link to the petrochemicals island around 2022.

These latest projects, under the government's ongoing JI 2.0 initiative, are aimed at boosting the global competitiveness of Singapore's petrochemicals sector, even as new rivals emerge in the Middle East and the US, where new plants are being built to capitalise on cheaper feedstocks from shale gas projects.

Giving an update on JI 2.0, Eugene Leong, head of Energy & Chemicals at the Economic Development Board, told The Business Times that the projects follow the recent establishment of new utilities plants employing alternative fuels such as coal/biomass and woodchips by Tuas Power and Sembcorp respectively. The latter is also set to use waste materials to produce utilities for petrochemical investors there. EDB is also encouraging more companies to set up in-house utilities plants using gas from the newly started Singapore LNG terminal.

"By providing more such options, whether in feedstocks, logistics or in other areas, greater robustness will be added to the system," he said.

The LPG terminal, for instance, will provide the petrochemical crackers here with an alternative to naphtha feedstocks.

"Globally, the economics to support the LPG project have improved as the world shifts to lighter feedstocks," he said, adding that the project is in its final stages, with EDB in advanced discussions with a private-sector investor. Earlier estimates put its cost at US$100-120 million.

Also under implementation is the JI safety and risk management centre, which is a multi-government agency effort to set up a centralised planning and strategic unit to oversee issues, such as fires and the environment on the island. A technical adviser, the UK Health & Safety Laboratory, has been appointed to advise on this, and the centre is looking at staffing requirements.

Mr Leong said that since JI 2.0 was first mooted three years ago, there have been new emerging challenges such as that posed by US shale gas. "But there is still a role for naphtha crackers like those in Singapore," he said, explaining that Asian petrochemicals demand is still growing strongly by a 10 per cent compounded annual rate, "so the region still needs some 20 million tonnes per annum of cracking capacity, which works out to close to two crackers annually".

"Also, as gas is lighter, naphtha crackers are still needed to produce the heavier petrochemicals or olefins like butadiene," he said. This explains why Petrochemical Corporation of Singapore is carrying out a plant expansion for this.

"Jurong Island's big geographical advantage is also that we have the Asian market in our backyard," Mr Leong said. And it is not just China, but also the Asean region which has been growing very strongly economically over the past few years, making this a strong regional demand centre for petrochemicals, he added.

During the same interview, Dennis Tan, director for JTC Corporation's Biomedical and Chemicals cluster, disclosed that JTC is planning to build a second road link from Jurong Island to the mainland, with this crossing the Jurong West Channel to the Jurong West area. This will help alleviate the current checkpoint congestion especially during morning peak hours.

"It will be a major engineering challenge and we are studying options of where to connect, and how to connect, including whether it should be above or below the sea."

"The mainland part is also already developed, so there will be other key considerations like its impact on transport network flows and on industries already operating there, as well as other issues like financial, environment and the land involved," he said.

"At this point, the study will take a couple of years, then we go into the necessary government approvals, followed by construction, which will also take a couple of years. So the earliest this second link can be operational will be around 2022, or in nine years' time," Mr Tan said.

Logistics-wise, a new Jurong Island barging terminal is also supporting movement of hazardous chemicals from plants there.

Complementing the usual overland trucking of containers or tanks from the petrochemicals island, the terminal, which started up last year, allows barges to take the chemicals directly to the port for onward export, he said.

On the $890 million first phase of the underground Jurong Rock Cavern oil storage, Mr Tan said that testing and pre-commissioning has started on the first two of the five caverns, with the entire phase set for completion next year, in time for its first customer, Jurong Aromatics Corporation, which is starting up then.

An operator for the JRC project is expected to be picked by year-end, he added.


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