Shell goes ahead with 2 new key S'pore plants

SINGAPORE - Shell has given the green light for two new world-scale plants in Singapore - one for making high-purity ethylene oxide (HPEO) and the other for carrying out ethoxylation - marking a key piece in the oil giant's latest multi-billion-dollar "jigsaw" of chemical investments here.

There are likely to be even more expansions here going forward, as they "will lay the foundation for future growth", Shell officials promised yesterday.

The new Shell plants will in turn help attract new downstream players, including surfactant and detergent makers for a start, to a new "high purity chemicals corridor" which Singapore wants on Jurong Island. This will be similar to the recent raft of synthetic rubber manufacturing investments here following greater availability of butadiene feedstock from the petrochemical crackers here.

Describing the latest projects as "two significant investments", Shell Chemicals executive vice-president Graham van't Hoff said: "They are part of a conscious strategy to continue investing in our existing assets to further increase their capacity and efficiency."

"This is vital for our growth in the long run, especially in Asia," he said, adding that Singapore continues to feature considerably in Shell's long-term plans.

The latest projects follow a recent spate of new Shell investments here, including February's announcement of an upgrading of its polyols plant here to produce materials needed to make high-quality foams used in furniture, bedding and the motor industry.

Construction of that new polyols project has started, with Shell breaking ground yesterday for its latest HPEO purification column with an initial 140,000 tpa capacity, and two world-scale ethoxylation units with a combined 140,000 tpa capacity.

Reflecting the scale of the investments, all three new projects, including associated facilities such as product tanks and an HPEO pipeline grid, will be built on a massive 35,000 sq m site (or about seven football fields), with the plants scheduled to start up in 2014.

They follow Shell's go-ahead last November to "debottleneck" and boost by over 20 per cent the capacity of its 800,000 tpa ethylene cracker on Bukom Island.

The expansion - which will max-out the cracker's production capacity - will provide the additional feedstock required by the three new projects.

Some feedstock for the new HPEO plant will also come from Shell's monoethylene glycol plant which was integral to its recent US$3 billion Shell Eastern Petrochemicals Complex investment.

Shell has so far spent more than US$10 billion in its integrated refinery and petrochemical complex here. And while Mr van't Hoff declined to specify exactly how much the group will splash out on its latest chemical investments here, it should easily run into additional billions of dollars, BT understands.

Senior Minister of State for Trade & Industry and National Development Lee Yi Shyan underlined this when he said at ceremonies yesterday that the latest projects by Shell, already one of the largest investors here, reflect its long-term confidence in the Republic's long-term future. They will enhance the collective competitiveness of the petrochemical industry here, he said.

Shell first surfaced the plan for its world-scale HPEO plant here exactly three years ago. But as an interim measure to cater to customers' HPEO needs, it bought out its Japanese partners in an existing downstream plant, Ethylene Glycol Singapore, in late 2010.

Explaining the rationale for its latest HPEO investment, Mr van't Hoff said: "The demand for alcohol ethoxylates in Asia is expected to increase at approximately 6-7 per cent annually over the next five years. The key driver for this is the move by consumers from laundry powder and soap bars to liquid detergent and liquid soaps, especially in China, India and South-east Asia."

As ethylene oxide is not easily transported, sufficient commitment from existing and new downstream HPEO customers in Singapore also helped to provide a trigger for the final investment decision, he said at a media conference.

The HPEO is used for industrial and oilfield applications like surfactants, viscosity modifiers and surface coatings, while ethoxylates, coming from the other two plants, are used for making home and personal care items like cleansers, detergents and shampoos, said Shell Chemicals GM Fang Yea Yee.

There is also provision to expand the HPEO plant in future through easy de-bottlenecking, Mr Fang added, saying that "it will provide the pathway and foundation for future growth". The additional HPEO can provide "building blocks" for other applications, for instance, concrete mixtures, or for solar silicon wafer cutting fluids.

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