Mitsui Petrochemical Industries Ltd., Japan's second largest petrochemical company, has decided to proceed with plans for a $180 million phenol plant on Jurong Island, site of Singapore's massive new petrochemical complex under development.
Against the backdrop of a depressed Asian petrochemical market, this will be Mitsui's second major investment in the island republic and a boost for Singapore's new chemical hub. There is also a possible third Mitsui investment in the offing.
Work on the 200,000 metric ton/ year phenol plant will start in August, with mechanical completion set for March 2001 and the project slated for commercial start-up by September 2001, in time for a recovery in demand expected then, said Ken Tomono, Mitsui's Singapore director. Mitsui's announcement coincided with a ceremony to mark the start of the largest and costliest ($764 million) reclamation phase for Jurong Island.
Exxon tie-in
Mitsui's affirmation of the project go-ahead follows Exxon Corp.'s confirmation that it is proceeding with plans for a $2 billion olefins complex on Jurong Island, its upcoming merger with Mobil Corp. notwithstanding.Mitsui's siting of the phenol plant at Jurong Island will allow it to capitalize on the synergies available at the evolving petrochemical hub.
On one end, the phenol plant will be able to secure propylene feedstock from Exxon's Jurong cracker, which will be ready by the end of 2000, said Tomono. And at the other end, the latest Mitsui investment will also supply feedstock and "forward-integrate" with its first Singapore project, a $66 million bis-phenol-A (BPA) plant that is currently under construction.
Tomono said that, while Asia's economic crisis has crimped regional demand for phenol resins and phenol glue, used by the car and timber industries, the market is expected to recover in 2-3 years, thus justifying Mitsui's decision to proceed with the project.
Another positive factor is that one third of the phenol output will be used to feed its BPA plant in Singapore.
Its earlier, 70,000 ton/year BPA plant is to be completed by September and will consume 60,000 tons/year of phenol.
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